Core Insights - Chewy Inc.'s Hardgoods segment showed significant growth in Q1 2025, with revenues increasing by 12.3% year over year to $342.2 million, surpassing the overall revenue growth of 8.3% [1][10] - The company added over 150 new brands and halved SKU onboarding time, enhancing product selection and market execution speed [2] - Management noted broad-based growth across hardgoods subcategories, driven by improved inventory management, personalized merchandising, and enhanced digital discoverability [3] Sales and Market Position - Chewy's strategy to increase wallet share beyond essential products is evident, with hardgoods showing potential for deeper customer relationships and incremental revenue [4] - The company's hardgoods performance contributed to strengthening market share and resilient growth, maintaining full-year revenue guidance of $12.3–$12.45 billion, reflecting a growth rate of 6–7% adjusted for the previous year's extra week [5] - Chewy's net sales outperformed key competitors, including Central Garden & Pet Company and Petco Health and Wellness [6] Competitor Analysis - Central Garden & Pet reported Q2 fiscal 2025 net sales of $833.5 million, down 7.4% year over year, affected by weather delays and product line losses, though e-commerce and Wild Bird segments performed well [7] - Petco Health and Wellness reported Q1 fiscal 2025 net sales of $1.49 billion, down 2.3% year over year due to store closures, with expectations of low single-digit sales decline for 2025 [8] Financial Performance - Chewy's shares have increased by 17% year to date, outperforming the industry's growth of 9.5% [9] - The company trades at a forward price-to-sales ratio of 1.26X, below the industry average of 2.17X, with a Value Score of C [11] - The Zacks Consensus Estimate for Chewy's fiscal 2025 earnings indicates a year-over-year growth of 23.1%, with upward revisions for estimates over the past 60 days [12]

Investors with an interest in Internet - Commerce stocks have likely encountered both eBay (EBAY) and Chewy (CHWY) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores hi ...

Chewy Inc. (CHWY) is currently in Phase 8 of its 18-phase Adhishthana Cycle, and while the stock has faced its share of pain, the structure is beginning to show signs that favor long-term bulls. Here's a look at the setup through the lens of Adhishthana Principles. One notable alignment occurred in Phase 3, when Chewy formed the Adhishthana Yajya. A pattern where the stock traces a hand's arc before plunging sharply. True to the principle, Chewy followed this path and declined by over 72%. While the drop wa ...

Core Insights - Chewy's Autoship subscription program is a key driver of customer loyalty and growth, with sales reaching $2.56 billion in Q1 fiscal 2025, a 14.8% increase year over year, significantly outpacing overall revenue growth of 8.3% [1][9] - The share of Autoship in total net sales has risen to 82.2%, the highest in the company's history, indicating its increasing importance [1][4] Customer Engagement - Strong momentum in Autoship was driven by higher enrollment and improved retention of existing subscribers, supported by a broad product assortment and a seamless digital experience [2] - Chewy ended the quarter with 20.8 million active customers, a 3.8% year-over-year increase, with many new customers quickly enrolling in Autoship [3] Financial Performance - Autoship has grown from 66% of net sales at the time of the IPO to over 82% today, reflecting better conversion of new customers and stronger long-term engagement [4] - Chewy's fiscal 2025 sales outlook is projected at $12.3 billion to $12.45 billion, indicating a growth of 6% to 7%, assuming continued strength in Autoship [4] Competitive Landscape - Chewy's net sales have outperformed key competitors like Central Garden & Pet Company and Petco Health and Wellness [5] - Central Garden & Pet reported a 7.4% decline in net sales to $833.5 million, while Petco's net sales decreased by 2.3% to $1.49 billion [6][7] Valuation and Earnings Estimates - Chewy's shares have gained 13.4% year to date, outperforming the industry's growth of 7.6% [8] - The company trades at a forward price-to-sales ratio of 1.22X, below the industry average of 2.17X, with a Zacks Consensus Estimate for fiscal 2025 earnings indicating a year-over-year growth of 23.1% [10][11]

Core Viewpoint - The article emphasizes a fundamentals-based approach to value investing, arguing against the misconception that low multiple stocks are inherently cheap, and highlights the importance of long-term growth and a strong balance sheet in investment decisions [1]. Group 1: Investment Philosophy - The company seeks to identify firms that provide long-term durability at affordable prices, focusing on steady growth and minimal cyclicality [1]. - There is an acknowledgment of the risks involved in investing in successful companies, particularly the potential to overpay, which underscores the significance of valuation [1]. - The article suggests that in certain scenarios, the potential for growth may outweigh immediate price considerations, indicating a broader perspective on investment timing [1].

Core Viewpoint - Chewy (CHWY) stock experienced a significant decline of over 20% after reaching a two-year high of $48.62 on June 6, primarily due to an 11% drop following earnings on June 11, but is currently testing a historically bullish trendline [1] Group 1: Stock Performance - CHWY is trading within one standard deviation of its 80-day moving average, having closed above this trendline in eight of the last ten sessions [2] - Historical data indicates that similar signals have led to a 78% chance of CHWY being higher one month later, with an average gain of 10.9% [3] - From its current price of $38.68, a similar gain would eliminate its 9.3% quarter-to-date deficit and extend its 15.4% year-to-date lead [3] Group 2: Technical Indicators - CHWY's 14-Day Relative Strength Index (RSI) is around 33, indicating it is in "oversold" territory, which has historically preceded rallies [3] - The stock is experiencing a potential short squeeze, with short interest up 7.7% and 15.51 million shares sold short, accounting for 7.3% of the total float [5] Group 3: Options Market Sentiment - The 10-day put/call volume ratio for CHWY is 0.68, indicating a higher level of pessimism among options traders compared to the past year [6] - Options are currently affordably priced, with a Schaeffer's Volatility Index (SVI) of 38% in the low 7th percentile of its annual range, suggesting a potential premium-selling strategy [7]

Group 1 - Chewy's stock closed at $40.00, down 2.49% from the previous day, underperforming the S&P 500 and Dow indices [1] - Over the past month, Chewy's shares have declined by 11.8%, contrasting with a 1.87% gain in the Retail-Wholesale sector and a 3.94% gain in the S&P 500 [1] Group 2 - Chewy is expected to report an EPS of $0.33, reflecting a 37.5% increase year-over-year, with anticipated revenue of $3.08 billion, a 7.83% rise from the same quarter last year [2] - For the full year, earnings are forecasted at $1.28 per share and revenue at $12.48 billion, indicating growth of 23.08% and 5.21% respectively compared to the previous year [3] Group 3 - The Zacks Rank system, which evaluates estimate changes, currently ranks Chewy at 3 (Hold), with a recent 12.9% upward shift in the EPS estimate [5] - Chewy's Forward P/E ratio stands at 32.1, higher than the industry average of 25, indicating a premium valuation [5] Group 4 - Chewy has a PEG ratio of 3.46, significantly above the Internet - Commerce industry's average PEG ratio of 1.44, suggesting a higher valuation relative to expected earnings growth [6] - The Internet - Commerce industry is ranked 62 in the Zacks Industry Rank, placing it in the top 26% of over 250 industries [6]

Core Insights - Chewy (CHWY) reported a 6.2% adjusted EBITDA margin in Q1 of fiscal 2025, an increase of 50 basis points year over year, with adjusted EBITDA rising 18.3% to $192.7 million from $162.9 million a year ago, indicating disciplined execution and progress toward long-term profitability targets [1][9] Financial Performance - The improvement in margins was driven by a focus on high-margin, recurring revenue streams, particularly the Autoship program, and the expansion of the sponsored ads business, which is the largest contributor to margin gains [2] - Operational discipline was evident as SG&A was maintained at 18.5% of net sales, reflecting tight cost control, while adjusted earnings per share increased 12.9% year over year to 35 cents, highlighting consistent bottom-line growth alongside margin expansion [3] Future Outlook - Management reaffirmed its 2025 adjusted EBITDA margin outlook of 5.4-5.7%, with the mid-point implying a 75-basis-point improvement from 2024, expecting approximately 60% of this expansion to come from gross margin gains [4] - Chewy aims to convert about 80% of adjusted EBITDA into free cash flow for 2025, with confidence in achieving a long-term adjusted EBITDA margin goal of 10% [5] Industry Comparison - Central Garden & Pet (CENT) reported a resilient margin performance in Q2 of fiscal 2025 despite a 7% revenue drop, with gross margin expanding by 180 basis points to 32.8% and adjusted earnings per share rising to $1.04 [6] - Petco Health and Wellness Company, Inc. (WOOF) focused on restoring profitability in Q1 of fiscal 2025, achieving a gross margin expansion of 30 basis points to 38.2% and an adjusted EBITDA margin improvement of 105 basis points to 6% [7] Stock Performance and Valuation - Chewy's shares have gained 23.3% year to date, outperforming the industry's growth of 7.4% [8] - The Zacks Consensus Estimate for Chewy's fiscal 2025 earnings implies year-over-year growth of 23.1%, with upward revisions in estimates for fiscal 2025 and 2026 [10] - Chewy trades at a forward price-to-sales ratio of 1.33X, below the industry's average of 2.02X, with a Value Score of B [13]

Key Takeaways Autoship hit a record $2.56B in Q1, driving 82% of sales and highlighting reliable recurring revenues. Active customers grew 3.8% y/y to 20.8M, adding about 240K customers sequentially. Vet clinics expanded to 11 locations, while Chewy and sponsored ads continued to boost engagement.Chewy (CHWY) is a leading player in the pet care industry, utilizing its robust e-commerce platform to serve a growing population of pet owners. CHWY is currently trading at a forward 12-month price-to-sales (P/S ...

Key Takeaways Chewy added 240K customers in Q1, growing active customers 3.8% y/y to 20.8M. Higher reorder rates, lower churn and stronger customer spend improved retention quality. Net sales grew 8.3% to $3.12B, fueled by Autoship, pharmacy, vet clinics and Chewy expansion.Chewy (CHWY) demonstrated a noticeable acceleration in active customer growth in the first quarter of fiscal 2025, reflecting the success of its ongoing customer acquisition and retention strategies. The company closed the quarter with ...