Chewy $CHWY ( ▲ 0.47% ) is slipping in premarket trading after issuing a softer Q4 forecast that overshadowed what was otherwise a strong Q3. The pet retailer delivered revenue and earnings that came in ahead of expectations, and CEO Sumit Singh highlighted continued market share gains and profit growth outpacing sales.
Chewy also reported more than 21 million active customers and said its autoship program now accounts for the vast majority of revenue, reinforcing how sticky its subscription-style model has become.
The problem is the road ahead. Chewy’s Q4 revenue and earnings outlook came in lighter than Wall Street hoped for, immediately cooling enthusiasm around its solid performance last quarter. Investors were looking for signs of momentum heading into next year, and the company’s cautious tone was enough to pull attention away from its Q3 beat.