Unpacking Q3 Earnings: Chewy (NYSE:CHWY) In The Context Of Other Online Retail Stocks

December 06, 2024 at 03:00 AM EST

CHWY Cover Image

The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how online retail stocks fared in Q3, starting with Chewy (NYSE: CHWY).

Consumers ever rising demand for convenience, selection, and speed are secular engines underpinning ecommerce adoption. For years prior to Covid, ecommerce penetration as a percentage of overall retail would grow 1-2% annually, but in 2020 adoption accelerated by 5%, reaching 25%, as increased emphasis on convenience drove consumers to structurally buy more online. The surge in buying caused many online retailers to rapidly grow their logistics infrastructures, preparing them for further growth in the years ahead as consumer shopping habits continue to shift online.

The 6 online retail stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.2% while next quarter’s revenue guidance was 0.7% below.

Luckily, online retail stocks have performed well with share prices up 12.9% on average since the latest earnings results.

Chewy (NYSE: CHWY)

Founded by Ryan Cohen who later became known for his involvement in GameStop, Chewy (NYSE: CHWY) is an online retailer specializing in pet food, supplies, and healthcare services.

Chewy reported revenues of $2.88 billion, up 4.8% year on year. This print exceeded analysts’ expectations by 0.7%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ EBITDA estimates.

Unsurprisingly, the stock is down 7.4% since reporting and currently trades at $31.09.

Is now the time to buy Chewy? Access our full analysis of the earnings results here, it’s free.

Best Q3: Carvana (NYSE: CVNA)

Known for its glass tower car vending machines, Carvana (NYSE: CVNA) provides a convenient automotive shopping experience by offering an online platform for buying and selling used cars.

Carvana reported revenues of $3.66 billion, up 31.8% year on year, outperforming analysts’ expectations by 5.3%. The business had an exceptional quarter with a solid beat of analysts’ EBITDA estimates.

Carvana delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 23.5% since reporting. It currently trades at $256.10.

Is now the time to buy Carvana? Access our full analysis of the earnings results here, it’s free.

Weakest Q3: Wayfair (NYSE: W)

Launched in 2002 by founder Niraj Shah, Wayfair (NYSE: W) is a leading online retailer for mass market home goods in the US, UK, Canada, and Germany.

Wayfair reported revenues of $2.88 billion, down 2% year on year, in line with analysts’ expectations. It was a slower quarter as it posted a significant miss of analysts’ number of active customers estimates and a decline in its buyers.

Wayfair delivered the weakest performance against analyst estimates and slowest revenue growth in the group. The company reported 21.7 million active buyers, down 2.7% year on year. Interestingly, the stock is up 15% since the results and currently trades at $49.25.

Read our full analysis of Wayfair’s results here.

Amazon (NASDAQ: AMZN)

Founded by Jeff Bezos after quitting his stock-picking job at D.E. Shaw, Amazon (NASDAQ: AMZN) is the world’s largest online retailer and provider of cloud computing services.

Amazon reported revenues of $158.9 billion, up 11% year on year. This number surpassed analysts’ expectations by 1%. Overall, it was a strong quarter as it also produced an impressive beat of analysts’ operating income and earnings estimates.

The stock is up 18.3% since reporting and currently trades at $220.32.

Read our full, actionable report on Amazon here, it’s free.

Coupang (NYSE: CPNG)

Founded in 2010 by Harvard Business School student Bom Kim, Coupang (NYSE: CPNG) is an e-commerce giant often referred to as the "Amazon of South Korea".

Coupang reported revenues of $7.87 billion, up 27.2% year on year. This result beat analysts’ expectations by 1.4%. It was a strong quarter as it also put up a solid beat of analysts’ EBITDA estimates.

The company reported 22.5 million active buyers, up 11.4% year on year. The stock is down 10.7% since reporting and currently trades at $24.02.

Read our full, actionable report on Coupang here, it’s free.

Market Update

Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.

Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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