Chewy Inc

CHWY: XNYS (USA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	$19.00	Pklmw	Dmkmsldbrl

Chewy Earnings: Retailer Turns a Corner on Profitability and Customer Growth, to Market's Delight

Sean Dunlop

Aug 28, 2024

Narrow-moat Chewy posted solid second-quarter results, with the combination of strong margin performance and modest sequential growth in active customers driving a more than 15% intraday surge in the share price after the release. Up more than 25% so far in 2024, the stock now looks fairly priced as the market appears to have come around to our views regarding the petcare retailer's attractive long-term competitive position and margin expansion prospects. As we digest earnings, we expect to raise our $29 fair value estimate by a low-single-digit percentage due to time value and faster-than-expected margin expansion.

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