In spite of some well-earned skepticism, Chewy.com has not precisely charted the course of its predecessors, infamous Internet bubble disaster Pets.com. A year after its initial public offering, Pets.com had been dead for three months, its very name sold off to the same company that went on to create Chewy, PetSmart. A year after its initial public offering, Chewy has more than doubled in value and is rolling in revenue from all of those people who thought adopting a pet in the middle of a pandemic was a good idea.

All in all, well done, Chewy. And now for some well-earned skepticism.

High growth expectations were probably already baked in: Chewy’s stock was already up more than 77% this year. The company also gave somewhat tepid sales guidance for the present quarter, implying flat sales to just 1.2% growth sequentially….

The company said it was able to spend less, partly because it saw a lot of organic traffic to its website. However, it expects these costs to increase over the rest of the year as it plans to ramp up marketing.

A lot of the gains were specific to the peak pandemic months. Pet foster and adoption numbers were 60% higher in March and April compared with the previous years, Chewy’s chief executive said during the earnings call late Tuesday…. By May, however, the pace of pet adoption had reverted back to pre-pandemic levels.

Chewy Stock May Be Overfed [WSJ]

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