Core Insights - Chewy, the largest online pet retailer in the U.S., went public in June 2019 at $22 per share and reached an all-time high of $118.69 in February 2021, showcasing its market dominance and rapid growth [1][2] Sales and Customer Growth - In fiscal 2020, Chewy's net sales surged by 47%, active customers increased by 43%, and net sales per active customer rose by 3%, largely driven by the pandemic [3] - Growth in active customers and net sales slowed in fiscal 2021 as the pandemic effects waned, with a decline in active customers in fiscal 2022 and 2023 due to rising inflation and increased competition from Amazon [4] - Year-over-year metrics show a decline in active customer growth from 8% in FY 2021 to a projected 5% in 9M 2025, while net sales growth decreased from 24% in FY 2021 to a projected 8% in 9M 2025 [5] Strategic Developments - Despite the slowdown, Chewy has been gaining active customers and increasing net sales per active customer through growth in Autoship subscriptions, private label products, integrated ads, and pet health insurance [6] - In Q3 2025, 83.9% of net sales came from Autoship customers, up from 79.2% in FY 2024, indicating a strong reliance on this subscription model [7] Stock Performance - Chewy's stock has declined over 70% from its all-time high, reflecting a cooling growth trajectory in the post-pandemic market [8]

Core Insights - Chewy (CHWY) experienced significant growth in active customers, reaching 20.8 million, a 3.8% year-over-year increase, with an addition of approximately 240,000 customers sequentially [1][11] - The company demonstrated improved customer retention and acquisition strategies, evidenced by a reduction in churn and higher reorder rates [2][3] Customer Growth and Retention - Chewy's active customer growth was supported by robust gross customer additions and a meaningful reduction in churn, indicating effective retention strategies [2] - The quality of new customer cohorts improved, leading to higher reorder rates and increased spending levels [3] Financial Performance - Net sales for the fiscal first quarter rose 8.3% year-over-year to $3.12 billion, driven by the expansion of Autoship subscriptions, healthcare services, and the Chewy+ membership program [3][4] - Net Sales Per Active Customer increased by 3.7% year-over-year to $583, indicating stronger customer engagement [4] Future Outlook - Chewy expects low-single-digit active customer growth for fiscal 2025, with current trends suggesting a potential for higher growth within that range [5] - The company maintained its full-year revenue guidance between $12.3 billion and $12.45 billion, implying a 6-7% year-over-year growth [5] Competitive Positioning - Chewy's net sales growth outperformed key competitors such as Central Garden & Pet Company (CENT) and Petco Health and Wellness Company, Inc. (WOOF) [6] - Central Garden & Pet reported a 7.4% year-over-year decline in net sales, while Petco experienced a 2.3% decline due to store closures [7][8] Stock Performance and Valuation - Chewy's shares have gained 27.3% year-to-date, significantly outperforming the industry growth of 7.7% [9] - The company trades at a forward price-to-sales ratio of 1.38X, below the industry average of 2.02X, indicating potential value [12] Earnings Estimates - The Zacks Consensus Estimate for Chewy's fiscal 2025 earnings implies a year-over-year growth of 10.3%, with a 7.3% increase expected for fiscal 2026 [13]