Chewy Gears Up for Q4 Earnings: Here's What Investors Should Know

Chewy, Inc. CHWY is likely to register an increase in both top and bottom lines when it reports fourth-quarter fiscal 2024 results on March 26, before the market opens. The Zacks Consensus Estimate for quarterly revenues is pegged at $3.2 billion, which indicates a 13.1% increase from the year-ago period. The consensus mark for fiscal 2024 top line is pegged at $11.81 billion, which indicates an increase of 6.1% from the year-ago level.The consensus mark for quarterly earnings has increased a penny in the past 30 days and is pegged at 21 cents per share. The figure implies an increase of 16.7% from the prior-year quarter. The consensus mark for fiscal 2024 earnings is pegged at $1.07 per share, implying an increase of 55.1% from the prior year’s reported figure. The company delivered a trailing four-quarter earnings surprise of 30.9%, on average.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Chewy Price, Consensus and EPS Surprise Chewy price-consensus-eps-surprise-chart | Chewy QuoteThings to Consider Ahead of CHWY’s Upcoming ResultsChewy’s Autoship program’s continued success is expected to have played a crucial role in driving revenues. As the program grows, its convenience and value are expected to have led to higher customer retention and repeat purchases. With 80% of the third quarter of fiscal 2024 sales coming from Autoship customers, this segment remains a key driver of predictable and recurring revenues. Chewy’s expansion into the $25 billion pet healthcare market through its vet clinics has been gaining traction. With six clinics already operational and strong cross-category engagement from new customers, this segment could emerge as a significant growth driver. The company's goal of reaching the upper end of its clinic expansion target could indicate strong momentum in this category.Chewy’s focus on mobile app enhancements and digital engagement is expected to have contributed to increased customer spending. A growing share of purchases now comes from the app, where Autoship adoption and order values tend to be higher. The Chewy+ membership program has been showing early success in boosting customer retention and cross-category purchases. These digital improvements would lead to higher conversion rates and a more seamless shopping experience.While the aforementioned factors have raised optimism, higher marketing and advertising expenses could weigh on margins in the near-term. In the fiscal fourth quarter, CHWY increased advertising efforts to capitalize on holiday demand, which are likely to have impacted short-term profitability. These investments are expected to have collectively pressured both top and bottom lines in the fiscal fourth quarter.Moreover, discretionary spending on hard goods remains challenging, despite Chewy’s overall resilience in pet essentials. A cautious consumer environment could weigh on demand for non-essential pet products like toys and accessories. If inflationary trends persist, customers may continue prioritizing essential pet care over discretionary purchases, potentially affecting Chewy’s revenue mix.What the Zacks Model Unveils for CHWYOur proven model does not conclusively predict an earnings beat for Chewy this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.Chewy has a Zacks Rank #2 and an Earnings ESP of -1.75% at present. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.Stocks With the Favorable CombinationHere are three companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:Deckers Outdoor Corporation DECK has an Earnings ESP of +6.50% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.The company is expected to register a top-line increase when it reports fourth-quarter fiscal 2025 numbers. The consensus mark for Deckers’ quarterly revenues is pegged at $992.8 million, which indicates an increase of 3.4% from the year-ago quarter. The consensus estimate for DECK’s earnings is pegged at 55 cents per share, down 33.7% from the year-ago quarter. DECK delivered a trailing four-quarter earnings surprise of 36.8%, on average.eBay Inc. EBAY has an Earnings ESP of +0.36% and a Zacks Rank of 3 at present. EBAY’s top line is anticipated to decrease year over year when it reports first-quarter 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $2.6 billion, which indicates a 0.3% decline from the figure reported in the year-ago quarter. The consensus estimate for eBay’s earnings is pegged at $1.34 per share, up 7.2% from the year-ago quarter. EBAY delivered a trailing four-quarter earnings surprise of 3.4%, on average.Home Depot HD has an Earnings ESP of +0.14% and currently carries a Zacks Rank #3. HD’s top line is anticipated to increase year over year when it reports first-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $39.3 billion, which indicates a 7.9% rise from the figure reported in the year-ago quarter. The company is expected to register a decrease in the bottom line. The consensus estimate for Home Depot’s first-quarter earnings is pegged at $3.59 per share, down 1.1% from the year-ago quarter. HD delivered an earnings surprise of 2.6% in the last quarter.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report eBay Inc. (EBAY): Free Stock Analysis Report The Home Depot, Inc. (HD): Free Stock Analysis Report Deckers Outdoor Corporation (DECK): Free Stock Analysis Report Chewy (CHWY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks