1. Setup Recap
Original prediction (CHWY, before the open): called for a downside gap (mid-to-high single digits) on the idea that forward commentary would matter more than the quarter, with a risk of “good numbers, cautious outlook.”
What the base case expected: a decent print, but a softer forward view that pressures the stock on the open.
Key evidence emphasis (from the preview framing): guidance/tone risk as the swing factor.
2. Results vs Expectations
Reported results vs consensus:
- EPS beat consensus (adjusted EPS 0.32 vs 0.30 expected).
- Revenue beat consensus (3.12B vs 3.10B expected).
Guidance and management tone:
- The forward outlook for the next quarter came in slightly below what the Street was looking for (both earnings and sales ranges a bit light), and that was the headline for the tape.
Qualitative surprises:
- Nothing “broke” in the quarter; the market reaction centered on the caution embedded in the forward view.
3. Price Action & Scoreboard
Because this was before-the-open, the scoring window is: prior close → report-day open/close.
- Pre-earnings close: 34.84
- Reaction-day open: 37.20
- Reaction-day close: 35.37
Computed:
- Earnings gap return: 0.06774 (up)
- Session return: 0.01521 (up)
Scoreboard:
- Opening gap direction vs prediction: did not match (gapped up).
- Full-session direction vs prediction: did not match (still up, but faded hard).
- Meaningful reversal: no — it faded, but did not flip to a down close.
4. Options, Flows & Example Structures
Options/vol:
- No auditable post-print IV/skew reads in the captured sources here; not grading vol crush.
Flows / positioning:
- No clean, observable flow data in-scope to score.
Example structures:
- The specific suggested structures from the prediction aren’t available in the captured sources; not grading individual spreads.
5. Hindsight on Reasoning & Weights
- The model overweighted the odds that guidance would flip the entire day red; instead, the tape priced it as “beat, but outlook trims enthusiasm.”
- The more accurate framing would have been “gap up, fade, but hold a slightly green close.”
Weight check:
- Too much weight on guidance producing outright downside direction; not enough on “mixed reaction” (fade without a full reversal).
6. Lessons & Playbook Updates
Ticker-specific:
- CHWY can still fade hard on a cautious outlook even when the quarter beats — but that doesn’t guarantee a red close.
Process tweak:
- Separate “fade risk” from “down day” risk; they aren’t the same trade.
Published: