Stateside stock news now. Online pet product retailer Chewy (CHWY) surprised investors by reporting better than expected earnings after its shares sank roughly 13% in Tuesday's after-hours trading session.
The company's earnings per share beat analysts' predictions with quarterly earnings of $0.04 vs $0.11 (expected). Revenue rose to $2.43 billion from $2.14 billion, above analysts' expectations of $2.42 billion in sales for the quarter, a 13.7% jump from the previous year. However, the company reported a slight decline in gross margin to 27.5%, with continued concerns on supply chain and inflation issues.
After the company reported strong financial results, Chewy's shares surged 25% in Wednesday's after-hours trading session.
Elsewhere, pandemic stock favourite GameStop (GME) saw its shares drop less than 1% after the company reported its quarterly results, which include revenue of $1.38 billion vs $1.27 billion from the previous year and a loss of $2.08 per share, missing analysts expectations of a $1.45/share.
The video game retailer also recently announced it would soon launch an NFT marketplace. The pivot comes as the NFT market is tanking, but maybe its meme-stock status can look to help build a credible crypto wallet.
Why it matters
2022 has been brutal for retailers and pandemic-boom stocks. Inflation, growing labor costs and supply chain issues are impacting retailers of all types. Despite its revenues doubling, Chewy's stock has dropped more than 63% over the past 12 months and is currently at post-IPO lows; investors will likely monitor the stock to see how cheap it could get. On the flipside, meme stocks like Gamestop gained immense popularity during the pandemic and are looking to pivot to keep their heads above water. However, experts are unsure how much traction Gamestop's NFT marketplace will generate for the company's profit, and the recent cryptocurrency market isn't promising either.
