Don't Be Fooled by Chewy's Most-Cited Statistic

Core Viewpoint - Chewy's Autoship program, while highlighted as a significant revenue source, does not accurately reflect the company's recurring revenue potential, as the metric used is misleading and includes non-Autoship sales [2][5][11] Revenue and Financial Performance - Chewy generated $3.1 billion in revenue during the latest quarter, with nearly 84% attributed to what it calls Autoship customer sales [1][10] - Revenue growth was modest at 8.3% in the third quarter of 2025, and the core business operates with a low GAAP operating margin of 2.1% [10] Customer Metrics - The number of active customers reached 21.2 million in the latest quarter, indicating an increase in customer engagement and spending [7][8] - Chewy's definition of an Autoship customer includes any customer who has had an order shipped through the Autoship program in the past 364 days, which may inflate the perceived value of the Autoship metric [5][6] Valuation and Market Position - Chewy's stock has seen a significant decline, dropping over 40% from its 52-week high and nearly 80% from its all-time high during the pandemic [9] - The stock currently trades at approximately 20 times the average analyst estimate for 2026 adjusted earnings per share, making it more attractive compared to previous valuations [9][10] Future Growth Potential - Chewy's expansion into veterinary care could serve as a future growth driver, although the current financial metrics present challenges [8][11]