Chewy Stock Jumps 7.4% on Results That Simply Avoided the Worst Case

Chewy’s results on Wednesday didn’t wow investors, but they also didn’t disappoint. That was enough for shares to jump 7.4% in premarket trading. The pet supplies retailer reported first-quarter results that met expectations, avoiding the drop in demand some investors feared after the CEO’s recent cautious comments. Here’s what the numbers showed and why a steady quarter made a difference.

Chewy reported adjusted earnings of 43 cents per share, matching analyst estimates. Net sales grew 7.7% to $3.36 billion, just above the $3.35 billion expected by Wall Street. The company did not offer any forward guidance in its earnings release.

The bigger picture is more important than the numbers alone. A few weeks before the earnings report, Chewy’s CEO warned that consumers were feeling more financial pressure than earlier in the year. This prompted investors to watch for signs of weaker demand in the pet category, which is usually seen as recession-resistant but not entirely immune to spending cuts. The first-quarter results did not show any major weakness. Revenue grew by more than 7%, and earnings matched analyst expectations, which helped shift investor sentiment from cautious to more positive.

Pet supply retailers have a unique place in consumer spending. Pet owners often keep spending on their animals even when they cut back elsewhere, which has usually helped companies like Chewy weather economic slowdowns. This trend continued in the quarter, despite the CEO’s earlier warnings.

The rest of the market was less upbeat. S&P 500 futures were down 0.7% when Chewy’s stock jumped, making its 7.4% gain even more noticeable against a cautious economic backdrop.