Fast Money Blog- 6/11/2021

On Thursday, June 10th Chewy Inc. (CHWY) reported Q1 2021 earnings.  The company’s top-line revenue came in at $2.14 billion, up 32% from a year ago.Chewy’s active customers increased by 4.7 million, or 31.6% year over year, to close the first quarter at a total of 19.8 million customers.  The company also reported that 69% of their volume stems from their auto-ship subscription programs. In addition, results were especially strong in the fastest growing segments of Chewy’s catalog, which include hardgoods, proprietary brands, pharmacy, and specialty, which collectively grew by 51.9% year over year. In 2018, Chewy was mostly a provider of food and treats. Today, just three years later, they give their customers a total pet care experience that spans food, treats, personalized accessories, healthcare, and most recently, services.  As you can see, their Q1 revenue growth is amazing. 

Chewy Stock From The Wealthy Investor’s Point of View:

Historically top-line revenue growth delivered by a company like Chewy would have caused the stock to rise by 10% or more. However in this market where institutional traders are still fearing an interest rate hike from the Federal Reserve, Chewy earnings were met by Wall Street with a lackluster response. I consider Chewy to be a major buy, but think the shares will trade in a range of $75 to $100 between now and Christmas. If you own shares above $75 you’ll have to be patient and sell 30 day out-of-the-money covered calls on a monthly basis for the next 3 to 6 months.