Chewy (NYSE:CHWY) posted stronger-than-expected first-quarter revenue but saw its stock fall more than 10% intra-day today after earnings fell short due to rising operating expenses.

For the quarter, net sales rose 8.3% year-over-year to $3.12 billion, narrowly topping consensus estimates of $3.08 billion. However, net income declined to $62.4 million, down from $66.9 million a year earlier and below analyst expectations of $70.9 million.

The online pet retailer faced a notable increase in operating costs, which rose to $846.9 million from $789.4 million, pressuring overall profitability despite steady top-line growth. The results reflect a business still expanding, but grappling with elevated expense levels that are eroding bottom-line performance.