Here's How Chewy+ Is Boosting Autoship and Wallet Share for Chewy

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]