Inflation-strapped pet owners are buying fewer toys and treats: Chewy

Pet owners hit hard by inflation aren’t spoiling their dogs and cats with new toys and treats, online retailer Chewy said.

Instead, they are rationing their money on food and other pet essentials, the company added.

“We saw weaker demand in the second quarter for discretionary products,” chief executive Sumit Singh said Tuesday during an earnings call in which the company cut its sales forecast for the rest of the year. .

Shares of Chewy plunged nearly 8% on Wednesday.

The company also said fewer people are getting new pets as inflation eats away at household budgets.

The Dania Beach, Fla.-based company, founded by billionaire Ryan Cohen, ended the quarter with 20.5 million active customers, an increase of 2.1%.

This contrasts with the scorching growth during the pandemic when 23 million American households, or about 1 in 5, adopted a pet, according to the American Society for the Prevention of Cruelty to Animals.

Pet-focused businesses have been the beneficiaries of the pandemic, but now the industry is gearing up for belt-tightening as consumers stick to the basics.

Chewy said revenue rose 13% to $2.43 billion in the second quarter ended July 31 from a year ago, but results were below Wall Street forecasts.

The company said it expects annual revenue of between $9.9 billion and $10 billion, which is below estimates of $10.25 billion.

« Broadly speaking, the buying cycle is not really favorable right now, » Singh said on the earnings call.