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Chewy (CHWY) To Report Q4 Earnings: What's In The Offing?

By Zacks Investment ResearchStock MarketsMar 05, 2020 07:04AM ET
www.investing.com/analysis/chewy-chwy-to-report-q4-earnings-whats-in-the-offing-200513521
Chewy (CHWY) To Report Q4 Earnings: What's In The Offing?
By Zacks Investment Research   |  Mar 05, 2020 07:04AM ET
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We expect Chewy, Inc. (NYSE:CHWY) to miss bottom-line estimates when it reports fourth-quarter fiscal 2019 results. In fact, the company’s bottom line missed the Zacks Consensus Estimate by 25% in the preceding quarter.

Moreover, the Zacks Consensus Estimate for fiscal fourth-quarter bottom line is pegged at a loss of 15 cents. We note that the consensus estimate was stable over the past 30 days. Meanwhile, the consensus mark for quarterly revenues stands at $1,348 million.

Key Factors to Note

Any deleverage in SG&A expenses, which comprise customer service costs and related fees as well as corporate payroll facilities, might show on Chewy’s bottom-line results for the fiscal fourth quarter. Investments associated with advertising and marketing are bumping up costs further. Moreover, the company has been witnessing incremental costs in relation to operating as a public company. Additionally, fourth-quarter revenues might have been hurt by the absence of the 53rd week this fiscal, as the extra week last fiscal had generated roughly $83 million.

Nevertheless, Chewy is trying all means to improve its e-commerce platform in a bid to become the most convenient online destination for pet owners. It has been expanding brand assortment and enhancing delivery capabilities by opening fulfillment centers. Its product innovation and Chewy Pharmacy also bode well. These factors bode well for fourth-quarter fiscal 2019 results.

What Does the Zacks Model Say?

Our proven model does not 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. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Although Chewy carries a Zacks Rank #3, its Earnings ESP of 0.00% makes surprise prediction difficult.

Stocks With a Favorable Combination

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat.

Village Farms International (TSX:VFF) currently has an Earnings ESP of +200.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Archer Daniels Midland Company (NYSE:ADM) currently has an Earnings ESP of +5.32% and a Zacks Rank #3.

Limoneira Company (NASDAQ:LMNR) has an Earnings ESP of +2.70% and a Zacks Rank #3.

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Archer Daniels Midland Company (ADM): Free Stock Analysis Report

Limoneira Co (LMNR): Free Stock Analysis Report

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Chewy Inc. (CHWY): Free Stock Analysis Report

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Zacks Investment Research

Chewy (CHWY) To Report Q4 Earnings: What's In The Offing?
 

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Chewy (CHWY) To Report Q4 Earnings: What's In The Offing?

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