Investing.com – Chewy (NYSE:CHWY) shares were up 16% in premarket Wednesday at their highest in nearly a month, after the online retailer of pet-related food and products reported better-than-expected revenues in the fourth quarter.
Chewy’s January quarter net sales grew 51% year-on-year to $2.04 billion and beat consensus estimates of $1.96 billion, according to TipRanks. The company’s gross margin expanded 190 basis points to 25.5%, riding on homebound consumers ordering food and other items for their pets in the lockdown.
In a note, Wells Fargo (NYSE:WFC) analyst Brian Fitzgerald reiterated a ‘buy’ rating on the stock ahead of the company’s announcement. His price target of $120 is higher by a third than the stock’s current elevated price.
Fitzgerald believes Chewy’s dominance of the online business will continue, noting that the company has a deeper engagement with its audience, reflected in unique visitor numbers and website visits that are three times higher than its nearest competition.