CHWY enters the final stretch before its August 26 earnings date with short sellers unwinding fast — a notable shift from the dug-in positioning described just six days ago.
The unwind is the week's standout. Short interest has dropped to 11.5% of the free float, roughly 25.9 million shares — down 17% from the 31 million peak that defined early August. The ORTEX short score has slid to 57.0, its lowest reading in at least two weeks, after sitting as high as 59.9 on July 27. That's a meaningful reversal. Last week's note flagged that the aggressive accumulation phase had plateaued; the data now shows active covering. The borrow market reinforces the picture: availability has expanded to 477%, up from 361% at last month's tightest point, meaning there are nearly five shares available for every one already lent out. Cost to borrow barely registers at 0.51%. This is not a stressed short book — it's one that is being trimmed ahead of a catalyst.
Options positioning remains measured. The put/call ratio at 0.69 is barely above its 20-day average of 0.68, with a z-score under 0.9. There's no rush for downside protection visible in the options market, despite the stock slipping 6.8% on the week to $22.47. That relative calm sits in contrast to the short-side retreat — bulls and bears alike appear to be waiting rather than pressing.
The Street consensus is constructive but became notably less so after the prior earnings print in June. Following a report that sent the stock down 8% on the day and 13% over the following five sessions, Goldman Sachs cut its target from $46 to $34 while holding Buy; JP Morgan trimmed from $35 to $29 at Overweight; and Barclays moved from $40 to $36, also Overweight. The mean price target now sits near $31 — around 38% above current levels — though all of those moves date from June 11-12, making them stale relative to where the stock trades today. Bulls point to Chewy's dominant e-commerce pet position and sticky autoship model; the bear case centres on macro pressure, competitive threats, and a premium valuation that has compressed materially. EV/EBITDA has drifted down to 8.9x. The 12-month forward EPS growth rank is in the 89th percentile, which is the one factor score that stands out positively; short score rank at 16th percentile and EV/EBIT at 15th are the drags.
CEO Sumit Singh sold roughly $1 million in shares on August 3 and another $654,000 on July 31. The CFO and Chief Accounting Officer also sold on July 31, though in smaller amounts. These are the largest insider transactions in the recent window. Collectively, the 90-day net insider position is a net sale of around $2.5 million. None of the trades carry high significance scores, and routine executive selling near these price levels is not unusual, but the clustering of multiple senior officers selling days before an earnings announcement is worth noting as context.
The setup for August 26 is therefore less about whether short sellers are pressing a crowded bet — they're not, having cut exposure by a sixth in a week — and more about whether Chewy can produce a result that breaks the pattern of the June print, where a seemingly solid quarter still produced a double-digit five-day decline. Peer ARHS rallied 18.8% on the week and CVNA added 5.8%, while SFIX fell 12% — consumer discretionary is moving in wide ranges, and Chewy's next print lands into that volatile backdrop.
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