Chewy (CHWY) is likely to report another "strong" quarter when it releases its fiscal Q4 results but may initiate a conservative 2025 guidance, Oppenheimer said in an earnings preview Tuesday.
"Similar to other retailers, we believe [Chewy] had a strong and potentially above-plan holiday season," the firm said.
Oppenheimer expects fiscal Q4 adjusted earnings before interest, taxes, depreciation and amortization of at least $120 million, above the Street's $117 million forecast.
The firm cited strength in discretionary categories and underlying business momentum, which could also translate to 13.3% sales growth in the quarter. Chewy's margin improvements-driven by management initiatives, product mix, and expense leverage-are expected to further support results.
Meanwhile, Oppenheimer said Chewy may introduce 2025 guidance below expectations, "reflecting conservatism similar to the initial FY24 guide."
The firm expects the company to introduce 2025 sales guidance closer to its forecasts, projecting $12.21 billion in sales, below the FactSet consensus of $12.38 billion. Adjusted EBITDA is expected to reach $673 million, compared to the consensus of $682 million.
Investor sentiment on Chewy's prospects has improved compared to early 2024, Oppenheimer added, pointing to at least three recent upgrades on the stock from sell-side analysts.
Oppenheimer has a perform rating on the stock.
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