Chewy (CHWY) will likely report "fine" Q1 results even though the company's management has indicated a deteriorating consumer backdrop intra-quarter, which may have contributed to a deceleration in dog adoptions, RBC Capital Markets said in a note emailed Friday.
Chewy is expected to report fiscal Q1 results before the market opens on June 10.
RBC said it updated Chewy's estimates to include the acquisition of veterinary care company Modern Animal, which is expected to close during Q2. For 2026 and 2027, RBC now expects net sales growth of 9.7% and 8.8%, compared with an increase of 8.5% and 8.8% previously.
The investment firm added the Modern Animal acquisition is "expected to be a low-cost, minimally disruptive integration."
For Q1, RBC said it expects net sales growth of 7.9% year-on-year, above the consensus estimate of 7.6% and compared with the company's guidance for an increase of 6.9% to 7.8%.
RBC said it expects Chewy's management to update its top-line outlook due to the Modern Animal deal and leave EBITDA margin outlook unchanged.
RBC has an outperform rating on Chewy and $47 price target.
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