Chewy Shares Slide Over 11% as Q2 Revenue Beats Forecast but Free‑Cash‑Flow Misses

SentiSense · Published Sep 9, 2026, 11:45 AM ET · Updated Sep 28, 2026, 2:45 AM ET

Chewy reported Q2 fiscal 2026 revenue of $3.33 billion, up 7.3% year over year and roughly $10 million ahead of the average analyst forecast, with adjusted EPS of $0.36 roughly in line with the $0.3614 estimate. Free cash flow of $89.5 million, down 15.5% year over year on a 71.1% jump in capital expenditures, drove shares down more than 11%, Chewy's worst trading day in about a year, despite management raising full-year guidance to $13.46-$13.57 billion in net sales. Needham reiterated Hold and Evercore ISI was the one firm to downgrade the stock (to In-Line from Outperform, citing organic growth decelerating to roughly 5.7%); Rosenblatt and Baird cut price targets to $24 and $28 respectively while keeping their ratings unchanged. SentiSense's own consensus across 26 covering analysts remains a Buy with an average target of $30.32, and sentiment on the stock stayed net positive even as the share price fell more than 10% on the day.

CHWY shares fell more than 11% after Chewy's fiscal second-quarter 2026 results, as a free-cash-flow shortfall overshadowed a revenue beat and raised full-year guidance. Chewy reported revenue of $3.33 billion, up 7.3% year over year and roughly $10 million ahead of the average analyst forecast, while adjusted earnings per share of $0.36 came in roughly in line with the $0.3614 consensus estimate rather than clearly ahead of it. Free cash flow fell 15.5% year over year to $89.5 million as capital expenditures surged 71.1% to $47.9 million, and that shortfall, not the top line, is what drove the sell-off.

Management raised its full-year outlook, guiding fiscal 2026 net sales to $13.46 billion to $13.57 billion and lifting the low end of its adjusted EBITDA margin guidance, pointing to continued growth in Autoship subscriptions and active customers even as the broader pet category faces soft discretionary spending. Autoship sales reached $2.82 billion, up 9.3% year over year and now 84.6% of total revenue, while active customers grew 3.8% to 21.7 million.

The cash-flow miss prompted a mixed set of analyst reactions on Thursday, though the reaction was less uniformly negative than initial reporting suggested. Needham & Company reiterated its Hold rating, and Evercore ISI was the one firm to actually downgrade the stock, moving to In-Line from Outperform and citing organic growth that has decelerated to roughly 5.7% with no clear near-term catalyst. Rosenblatt Securities and Robert W. Baird both cut their price targets, to $24 from $25 and to $28 from $30 respectively, while keeping their existing Neutral and Outperform ratings unchanged. Across the 26 analysts SentiSense tracks, the consensus as of September 10, 2026 remains a Buy, with 20 buy and 6 hold ratings and an average price target of $30.32.

The stock's worst trading day in roughly a year came after shares gapped down at the open and extended losses through the session. SentiSense's own tracking shows a notable divergence: news and social sentiment on Chewy stayed net positive even as the share price fell more than 10% on the day, a gap worth watching as investors weigh whether the cash-flow shortfall reflects temporary, timing-related capital spending or a tighter liquidity picture. Key points to monitor could include whether Chewy converts its raised sales guidance into stronger free cash flow, the trajectory of discretionary pet spending, and further analyst target revisions as more coverage comes in following the print. Market analysis only, not investment advice.