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 Insights - Chewy (CHWY) is a prominent player in the pet care industry, leveraging its strong e-commerce platform to cater to a growing number of pet owners. The stock is currently trading at a forward 12-month price-to-sales (P/S) multiple of 1.38X, which is below the industry average of 2.02X, raising questions about whether it is a buy, hold, or sell opportunity [1][21] Valuation Comparison - Chewy's valuation is attractive compared to peers such as Central Garden & Pet Company (CENT) at a forward 12-month P/S of 0.75, Petco Health and Wellness Company, Inc. (WOOF) at 0.15, and BARK, Inc. (BARK) at 0.33 [2] Stock Performance - Chewy's stock price has increased by 24.3% over the past three months, closing at $41.86, outperforming the industry's rise of 18.2% and the Retail - Wholesale sector's growth of 11.5% [3][5] - The stock is currently trading above its 50-day and 200-day moving averages of $41.53 and $35.26, indicating strong upward momentum and market confidence [9] Financial Performance - For the first quarter of fiscal 2025, Chewy reported net sales of $3.12 billion, an 8.3% year-over-year increase, exceeding guidance expectations [10] - The Autoship program generated record sales of $2.56 billion, accounting for 82% of total net sales and growing 14.8% year-over-year [11][13] - Chewy's active customer base grew to 20.8 million, a 3.8% year-over-year increase, with net sales per active customer rising by 3.7% to $583 [14] Growth Initiatives - Chewy's Vet Care business is expanding, with 11 clinics currently operating and plans to open 8-10 additional clinics in fiscal 2025 [15] - The Chewy+ membership program has successfully transitioned out of beta, showing increased customer engagement and order frequency [15] Future Outlook - For fiscal 2025, Chewy anticipates net sales between $12.3 billion and $12.5 billion, reflecting 6-7% year-over-year growth, with an adjusted EBITDA margin guidance of 5.4% to 5.7% [16] - The Zacks Consensus Estimate for EPS has seen upward revisions, with current estimates at $1.28 for the current year and $1.53 for the next year [17] Market Position - Chewy has demonstrated resilience through steady revenue growth and customer retention strategies, positioning itself as a high-growth, digitally native pet care leader [21]