Chewy shares drop 10.8% despite in-line Q2 results and raised 2026 sales forecast.

Chewy reported Q2 results largely in line with expectations, with net sales up 7.3% to $3.33 billion and adjusted earnings matching forecasts at $0.36 per share. However, shares fell 10.8% due to concerns about slowing organic growth, cautious consumer spending, and rising competition. The company raised its fiscal 2026 net sales guidance to $13.46-$13.57 billion but below its original forecast, signaling ongoing demand caution. Analysts remain divided, with Morgan Stanley seeing 73.5% upside potential at a $36 target, while Evercore ISI downgraded the stock to In Line with a $25 target due to market challenges.