Core Insights - ClearBridge Investments reported that mid-cap stocks experienced growth in Q3 2025, driven by a favorable monetary policy environment and stabilizing earnings [1] - The Federal Reserve's rate cuts positively impacted small and mid-cap stocks, with value stocks outperforming growth stocks [1] - The ClearBridge Mid Cap Strategy outperformed the Russell Midcap Index, primarily due to stock selection in the consumer staples and healthcare sectors [1] Company Analysis: Chewy, Inc. (NYSE:CHWY) - Chewy, Inc. is an online retailer specializing in pet food, supplies, medications, and services, with a market capitalization of $13.689 billion as of November 12, 2025 [2] - The stock experienced a one-month return of -13.07% and a 52-week gain of 0.86% [2] - Despite solid revenue growth, Chewy's stock declined due to increased growth investments impacting investor sentiment [3] - The company is expected to benefit from its strategic initiatives aimed at increasing recurring revenue and growth rate [3] Hedge Fund Interest - Chewy, Inc. was held by 58 hedge fund portfolios at the end of Q2 2025, an increase from 55 in the previous quarter [4] - While Chewy is recognized for its potential, certain AI stocks are viewed as offering greater upside potential with less downside risk [4]

Core Insights - The 2024 American Pet Products Association (APPA) National Pet Owners Survey indicates that 82 million US households own a pet [1] Industry Overview - The pet ownership statistic reflects a significant market for pet-related products and services, highlighting the potential for growth in the pet industry [1]

Company Performance - Chewy's stock increased by 2.65% to $34.47, outperforming the S&P 500 which fell by 0.99% [1] - Prior to this trading session, Chewy's shares had declined by 15.07%, underperforming the Retail-Wholesale sector's loss of 1.6% and the S&P 500's gain of 3.59% [1] Earnings Forecast - Chewy is expected to report an EPS of $0.31, reflecting a 55% growth compared to the same quarter last year [2] - Revenue is projected to be $3.1 billion, indicating a 7.58% increase from the year-ago quarter [2] Annual Estimates - For the annual period, earnings are anticipated to be $1.27 per share, with revenue expected at $12.59 billion, representing increases of 22.12% and 6.13% respectively from the previous year [3] - Recent revisions to analyst forecasts for Chewy are important as they often indicate short-term business trends [3] Valuation Metrics - Chewy's Forward P/E ratio stands at 26.42, which is higher than the industry's Forward P/E of 22.87 [6] - The PEG ratio for Chewy is currently 3.4, compared to the Internet - Commerce industry's average PEG ratio of 1.52 [6] Industry Context - The Internet - Commerce industry is part of the Retail-Wholesale sector and holds a Zacks Industry Rank of 150, placing it in the bottom 40% of over 250 industries [7] - The Zacks Industry Rank measures the strength of industry groups based on the average Zacks Rank of individual stocks, with the top 50% rated industries outperforming the bottom half by a factor of 2 to 1 [7]

Core Insights - Covetrus has entered into a definitive agreement with Chewy, Inc. for the acquisition of its SmartEquine business, allowing Covetrus to sharpen its focus on its core business of delivering technology-enabled solutions for veterinarians [1][2] - The transaction will enable Covetrus to concentrate on its integrated software, services, and distribution platform, enhancing tools that streamline operations and improve veterinary practice performance [2][3] Company Overview - Covetrus is a global animal-health technology and services company that supports companion, equine, and large-animal veterinary markets, delivering an integrated portfolio of products, software, and services [3][4] - The company is headquartered in Portland, Maine, employs over 5,000 people, and serves more than 100,000 customers worldwide, boasting over 60 years of experience in advancing veterinary care [4]

Core Viewpoint - Chewy, Inc. has announced a definitive agreement to acquire SmartPak Equine, LLC from Covetrus, Inc., enhancing its position in the pet healthcare market [1] Company Summary - Chewy, Inc. is a leader in pet food, supplies, and healthcare, indicating a strong market presence and expertise in the pet industry [1] - SmartPak Equine, rebranded as SmartEquine in July 2025, is recognized as a leading U.S. provider of equine health products, which aligns with Chewy's expansion strategy into specialized pet healthcare [1] Industry Summary - The acquisition reflects a growing trend in the pet industry towards subscription-based services and personalized nutrition plans, highlighting the increasing consumer demand for tailored pet health solutions [1] - SmartEquine's proprietary subscription-based supplement programs and broad portfolio of tack suggest a robust business model that complements Chewy's existing offerings [1]

Core Insights - Chewy, Inc. (CHWY) and Central Garden & Pet Company (CENT) are significant players in the pet care industry, each with distinct strategies focusing on different aspects of the market [1][2] Chewy, Inc. (CHWY) - Chewy reported net sales of $3.10 billion for Q2 of fiscal 2025, an increase of 8.6% year-over-year, exceeding guidance [2][9] - The Autoship program was a key driver, generating record sales of $2.58 billion, accounting for 83% of total net sales, and showing a 14.9% year-over-year increase [3][9] - The active customer base grew by 4.5% year-over-year to 20.9 million, with net sales per active customer rising 4.6% to $591 [4] - Chewy Vet Care plans to open 8-10 additional clinics in fiscal 2025, and the Chewy+ membership program exceeded internal targets, contributing 3% to July sales [5] - Adjusted EBITDA was reported at $183.3 million, with a margin of 5.9%, reflecting an 80-basis-point year-over-year increase [6] - Marketing expenses were $200.6 million, or 6.5% of net sales, aligning with the full-year target of 6-7% [7] - Chewy raised its full-year net sales guidance to $12.5-$12.6 billion, indicating a 7-8% year-over-year growth [7] Central Garden & Pet Company (CENT) - CENT's gross margin increased by 280 basis points to 34.6%, despite a 4% decline in quarterly net sales to $961 million [9][12] - The Central-to-Home strategy led to consumables rising to 82% of total pet sales, up from 79% a year ago [10] - E-commerce contributed 27% to total pet sales, with double-digit growth in garden categories [11] - The total net sales decline of 4% year-over-year was attributed to softer consumer demand and strategic product exits [13] - The garden segment faced a 4% sales drop due to unfavorable weather conditions and loss of product lines [14] - Management anticipates $10 million in tariff impacts for fiscal 2025, primarily affecting the fourth quarter [15] Comparative Analysis - Chewy's shares have decreased by 3.3% over the past three months, while CENT's stock has declined by 18.5% [19] - Chewy is trading at a forward price-to-sales (P/S) multiple of 1.09, while CENT's forward P/S multiple is at 0.64 [21] - Chewy is viewed as the stronger investment option due to its recurring revenue model and growth strategies, while CENT faces challenges from declining sales and external pressures [23][24]

Core Insights - Chewy, Inc. (CHWY) demonstrated strong customer growth in Q2 of fiscal 2025, ending with 20.9 million active customers, a 4.5% increase year-over-year, indicating effective engagement and retention strategies [1][10] Customer Growth and Sales Performance - The Autoship subscription model significantly contributed to sales, generating $2.58 billion, which accounted for 83% of total net sales in Q2, marking a nearly 15% year-over-year increase [2][10] - Net Sales Per Active Customer increased by 4.6% year-over-year to $591, reflecting improved customer spending and loyalty [2] Membership and Product Launches - Chewy's paid membership program, Chewy+, has shown strong performance, contributing approximately 3% of monthly sales, with members displaying higher purchase frequency and loyalty [3] - The launch of "Get Real," an exclusive fresh dog food brand, has expanded Chewy's private-label offerings, catering to the rising demand for premium pet nutrition [4] Future Outlook - Management is optimistic about sustaining active customer growth through continued investments in Autoship, Chewy+, and private brands, raising full-year revenue guidance to $12.5-$12.6 billion, representing 7-8% growth [5] Competitive Positioning - Chewy's net sales growth has outperformed key competitors such as Central Garden & Pet Company (CENT) and Petco Health and Wellness Company, Inc. (WOOF) [6] - Central Garden & Pet reported a 4% decline in net sales to $961 million, while Petco's net sales decreased by 2.3% to $1.49 billion [7][8] Valuation and Earnings Estimates - Chewy's shares have increased by 4.8% year-to-date, compared to the industry's growth of 9.7% [9] - The company trades at a trailing price-to-sales ratio of 1.22X, below the industry average of 2.69X, with a Zacks Consensus Estimate indicating a 22.1% year-over-year earnings growth for fiscal 2025 [11][12]

Core Insights - Chewy, Inc.'s membership program, Chewy+, is becoming a key driver of customer engagement and recurring revenues, contributing approximately 3% of total monthly sales in July and leading to higher spending and purchase frequency among members [1][2][9] - The Autoship feature is a significant contributor to sales, with a 14.9% year-over-year increase in customer sales, accounting for 83% of Chewy's net sales [3][5] - Management anticipates that Chewy+ will represent a mid-single-digit percentage of net sales by the end of fiscal 2025, enhancing the company's digital ecosystem [4][9] Financial Performance - Chewy's net sales grew 8.6% year over year to $3,104.2 million in the second quarter, with projections for fiscal 2025 net sales between $12.5 billion and $12.6 billion, indicating a growth rate of approximately 7% to 8% [5][11] - The net sales per active customer (NSPAC) increased by 4.6% year over year to $591, supported by a customer base of 20.9 million [3][11] - Chewy's shares have increased by 33.6% over the past year, outperforming the industry growth of 19.2% [8] Competitive Landscape - Central Garden & Pet Company reported a decline in net sales of 4% year over year to $960.9 million, attributed to assortment rationalization and lower demand in certain categories [6] - Petco Health and Wellness Company experienced a 2.3% decrease in total net sales year over year, primarily due to store closures, with expectations of a low single-digit decrease in net sales for fiscal 2025 [7] Valuation Metrics - Chewy trades at a forward price-to-sales ratio of 1.13, which is below the industry average of 2.23, indicating potential undervaluation [10] - The Zacks Consensus Estimate for Chewy's current financial-year sales implies a year-over-year growth of 6.1%, while earnings per share are expected to grow by 22.1% [11][15]

Core Viewpoint - NB Private Equity Partners (NBPE) reported its monthly NAV estimate for September 2025, highlighting a total NAV of $1.3 billion and various performance metrics over different time frames [1][2]. NAV Highlights - As of September 30, 2025, the NAV total return (TR) was 3.1% year-to-date and 11.5% over one year, with a significant 163.1% return over the past ten years [3]. - The MSCI World TR showed a much higher performance with a 17.8% year-to-date return and 239.5% over ten years, indicating a comparative underperformance of NBPE [3]. Portfolio Update - The NAV per share was reported at $27.44, reflecting a total return of (1.3%) for the month of September [5]. - In September, NBPE received $15 million in proceeds, contributing to a total of $101 million year-to-date, with an additional $64 million expected in the coming months [5][6]. - The company has $265 million in available liquidity, consisting of $55 million in cash and liquid investments, and $210 million in undrawn credit lines [8]. Investment Activity - NBPE deployed $10 million into a new investment in Infra Group, a network infrastructure provider, alongside PAI, marking a strategic move into a growing market [10]. - Year-to-date, the company has invested a total of $23 million into one new and three follow-on investments [10]. Share Buybacks - Approximately 261,000 shares were repurchased in September 2025 at a weighted average discount of 28%, resulting in an NAV per share accretion of approximately $0.05 [11]. - Year-to-date, NBPE has repurchased around 1.4 million shares, which has contributed to an NAV per share accretion of approximately $0.25 [11]. Portfolio Valuation - As of September 30, 2025, 93% of the portfolio was valued based on private direct investments, with 7% in public securities [11]. - The top 30 investments accounted for 78.6% of the total portfolio fair value, with significant holdings in various sectors including consumer, financial services, and technology [12]. Geographic and Sector Allocation - The portfolio is primarily concentrated in North America (76%) and Europe (24%), with no investments in Asia or the rest of the world [13]. - Sector allocation shows a diverse investment strategy, with 22% in Tech, Media & Telecom, 20% in Consumer/E-commerce, and 19% in Industrials [13].

Core Insights - Chewy Inc (NYSE:CHWY) is currently trading at $37.50, reflecting a 29.2% year-over-year increase, with the $36 level acting as a support floor after a recent pullback [1] - The stock has shown a strong trend, with a longer-term trendline indicating potential for further gains [1] Group 1: Stock Performance - The stock is within 0.75 of the 260-day moving average's 20-day average true range (ATR), having spent over 80% of the last 10 days and 42 days above this trendline [2] - Historical data shows that similar conditions have led to an 83% probability of the stock being higher one month later, with an average gain of 12.4% [2] - A similar upward movement could push the stock price above $42 [2] Group 2: Options Market Sentiment - The current put/call open interest ratio (SOIR) for Chewy is 1.02, indicating a higher level of pessimism compared to the past year [5] - Options are considered reasonably priced, with a Schaeffer's Volatility Index (SVI) of 42% ranking in the 19th percentile of its annual range, suggesting low volatility expectations from options traders [5]