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CHWY vs. CENT: Which Pet Care Stock Deserves a Spot in Your Portfolio?
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Key Takeaways
CHWY's Autoship hit $2.56B in Q1, 82% of sales, with 14.8% y/y growth and rising customer retention.
CENT's adjusted gross margin rose 200 bps to 33.3% in Q2, reflecting strong cost and supply-chain execution.
CENT's e-commerce made up 27% of Pet segment sales, boosted by new products and digital retail strategies.
Chewy, Inc. (CHWY - Free Report) and Central Garden & Pet Company (CENT - Free Report) are two prominent names in the pet care industry, each with a distinct operating model and growth strategy. Chewy operates as a digital-first, e-commerce powerhouse known for its Autoship program and expanding pet healthcare services, while Central Garden & Pet leverages a more diversified portfolio across pet and garden segments, focusing on operational efficiency and market share preservation.
With macroeconomic pressures and evolving consumer preferences reshaping the pet care landscape, investors are wondering: Which stock offers the better upside potential in the months ahead?
The Case for CHWY
Chewy has delivered a strong start to fiscal 2025, underscoring its growing leadership in the online pet retail market. In the fiscal first quarter, the company reported net sales of $3.12 billion, marking an 8.3% year-over-year increase and surpassing the high end of its guidance. This performance reflects CHWY’s disciplined execution and ability to capture market share, even as the broader pet category shows signs of normalization. The results highlight the company’s operational momentum and deepening customer engagement.
A major pillar of Chewy’s success remains its Autoship program, which continues to deliver robust growth. In the fiscal first quarter, Autoship sales reached a record $2.56 billion, accounting for 82% of total net sales. This marks a 14.8% year-over-year increase, outpacing overall company growth and reinforcing Autoship’s role as a driver of predictable, recurring revenues. The program also contributes significantly to customer loyalty, positioning Chewy for long-term value creation through stable customer relationships and frequent repeat purchases.
Customer growth remained a bright spot in the quarter. Chewy’s active customer base expanded 3.8% year over year to 20.8 million, with roughly 240,000 net new customers added sequentially. The company also saw a 3.7% rise in net sales per active customer to $583. These gains were fueled by strong gross additions, improved customer retention and successful execution across digital experience, marketing strategy and expansion into categories like health and consumables — all of which helped deepen customer engagement and drive spend per user.
Strategic initiatives beyond core retail also gained traction. The Chewy Vet Care business now operates 11 clinics in four states, with plans to open 8-10 more in fiscal 2025. The company’s sponsored ads segment showed sequential growth, supported by an expanding ad offering. Meanwhile, the Chewy+ membership program has moved out of its beta phase and is showing early signs of success in boosting order frequency, engagement and cross-category penetration, adding value to Chewy’s ecosystem.
Despite these strengths, CHWY faces ongoing challenges that may impact future performance. The company delivered a fiscal first-quarter adjusted EBITDA margin of 6.2%, but management noted that this would likely represent the peak for the year, with margins expected to decline sequentially due to seasonality, and increased investment in marketing and strategic initiatives. Although tariff risks remain minimal, industry-wide price shifts, particularly in discretionary categories like hard goods, may affect demand.
Marketing and advertising expenses reached $193.8 million, or 6.2% of sales, and are expected to rise to the upper end of 6.7-6.8% for the year. Sustaining profitability will therefore depend on Chewy’s ability to maintain strong top-line growth in the face of rising costs.
The Case for CENT
Central Garden & Pet is making strategic strides to solidify its leadership in the U.S. pet and lawn and garden markets. Through its Central-to-home strategy, the company continues to enhance customer experience via investments in digital tools, supply-chain upgrades, and targeted marketing. These efforts are supported by an innovation-driven product pipeline, with new offerings in both pet and garden categories planned for fiscal 2025 and beyond, aligning with evolving consumer preferences and sustainability trends.
The ongoing success of the Cost and Simplicity program underscores Central Garden & Pet’s focus on operational excellence. The recent addition of direct-to-consumer capabilities at its upgraded Pennsylvania center, along with the consolidation of two older facilities into a new DTC hub in Salt Lake City, is streamlining logistics and improving efficiency. These infrastructure moves are not only boosting productivity but also enhancing employee safety and service levels to customers.
A key highlight in the second quarter of fiscal 2025 was the opening of a 300,000-square-foot dog and cat distribution center in New Jersey, which has centralized warehousing and improved fulfillment in a rapidly growing category. These structural improvements contributed to record fiscal second-quarter operating income in the Pet segment and drove a 150-basis-point expansion in the operating margin to 14.5%, reflecting the tangible impacts of Central’s efficiency initiatives.
Margin performance remains a standout, with the company achieving a 200-basis-point improvement in the adjusted gross margin to 33.3% during the fiscal second quarter, building on the gains from the previous quarter. This consistent margin expansion, despite a challenging retail backdrop, demonstrates Central Garden & Pet’s ability to manage costs effectively. For the fiscal year, the company anticipates a 90-basis-point year-over-year gross margin increase, highlighting continued discipline in execution.
E-commerce is another pillar of growth, with digital sales accounting for 27% of total Pet segment revenues in the fiscal second quarter. This was driven by product launches, higher conversion rates and enhanced retail media strategies. The Garden segment also saw strong digital momentum, particularly in the Wild Bird and Grass Seed categories. With top online market share in both, Central Garden & Pet is well-positioned to capitalize on the ongoing shift to online shopping, supported by its omnichannel strategy and robust digital presence.
Finally, Central Garden & Pet’s financial health remains solid, giving it the flexibility to pursue strategic initiatives and return capital to shareholders. The company ended the fiscal second quarter with $517 million in cash and zero borrowings under its $750-million credit facility. With a net leverage ratio of 1.7X, it continues to operate well below its target range. Shareholder value remains a priority, reflected in the repurchase of 1.2 million shares worth $41 million, with $63 million still authorized, affirming Central Garden & Pet’s disciplined capital allocation and long-term focus.
CHWY vs. CENT: How Do Estimates Stack Up?
The Zacks Consensus Estimate for Chewy’s fiscal 2025 sales and earnings per share (EPS) implies year-over-year growth of 5.2% and 23.1%, respectively. The consensus estimate for EPS for the current fiscal year has increased by 5 cents in the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CENT’s fiscal 2025 sales and EPS suggests a year-over-year decline of 1.7% and growth of 17.8%, respectively. The consensus estimate for EPS for the current fiscal year has moved up by 16 cents in the past 30 days.
Image Source: Zacks Investment Research
CHWY vs. CENT: A Look at Stock Performances
Chewy’s shares have gained 1% over the past three months. Meanwhile, Central Garden & Pet’s stock has risen 19.6%. While CHWY’s modest gain reflects investor caution around near-term margin pressures, leadership transition and e-commerce volatility, CENT’s outperformance is driven by strong margin expansion, disciplined cost execution and resilient Pet segment profitability.
Image Source: Zacks Investment Research
CHWY vs. CENT: A Dive Into Stock Valuation
Chewy is trading at a forward price-to-sales (P/S) multiple of 1.20, above its median of 1.13 in the last three years. Central Garden & Pet’s forward 12-month P/S multiple sits at 0.85, above its median of 0.72 in the last three years.
The CENT stock looks attractive from a valuation perspective, offering compelling entry points for value-conscious investors. Moreover, with ongoing cost optimization and footprint consolidation, the company is well-positioned to sustain margin gains. We note that Chewy appears to be pricier than CENT in terms of their current P/S ratios.
Image Source: Zacks Investment Research
CHWY vs. CENT: Which is the Smarter Bet?
While both companies are navigating shifting consumer trends and macroeconomic headwinds, Central Garden & Pet stands out as the better investment case today. Its disciplined cost management, consistent margin expansion and strong execution in its Pet segment position CENT well for steady earnings performance. The company’s focus on operational efficiency, digital growth and capital returns supports a compelling value thesis.
In contrast, while Chewy offers strong long-term potential through its digital-first model and recurring revenue streams, it faces near-term margin pressures, increased marketing spend and execution risks tied to its expansion initiatives. With a more attractive valuation, stable fundamentals, and a proven ability to navigate uncertainty, Central Garden & Pet offers a more favorable risk-reward profile at this stage.
Image: Bigstock
CHWY vs. CENT: Which Pet Care Stock Deserves a Spot in Your Portfolio?
Key Takeaways
Chewy, Inc. (CHWY - Free Report) and Central Garden & Pet Company (CENT - Free Report) are two prominent names in the pet care industry, each with a distinct operating model and growth strategy. Chewy operates as a digital-first, e-commerce powerhouse known for its Autoship program and expanding pet healthcare services, while Central Garden & Pet leverages a more diversified portfolio across pet and garden segments, focusing on operational efficiency and market share preservation.
With macroeconomic pressures and evolving consumer preferences reshaping the pet care landscape, investors are wondering: Which stock offers the better upside potential in the months ahead?
The Case for CHWY
Chewy has delivered a strong start to fiscal 2025, underscoring its growing leadership in the online pet retail market. In the fiscal first quarter, the company reported net sales of $3.12 billion, marking an 8.3% year-over-year increase and surpassing the high end of its guidance. This performance reflects CHWY’s disciplined execution and ability to capture market share, even as the broader pet category shows signs of normalization. The results highlight the company’s operational momentum and deepening customer engagement.
A major pillar of Chewy’s success remains its Autoship program, which continues to deliver robust growth. In the fiscal first quarter, Autoship sales reached a record $2.56 billion, accounting for 82% of total net sales. This marks a 14.8% year-over-year increase, outpacing overall company growth and reinforcing Autoship’s role as a driver of predictable, recurring revenues. The program also contributes significantly to customer loyalty, positioning Chewy for long-term value creation through stable customer relationships and frequent repeat purchases.
Customer growth remained a bright spot in the quarter. Chewy’s active customer base expanded 3.8% year over year to 20.8 million, with roughly 240,000 net new customers added sequentially. The company also saw a 3.7% rise in net sales per active customer to $583. These gains were fueled by strong gross additions, improved customer retention and successful execution across digital experience, marketing strategy and expansion into categories like health and consumables — all of which helped deepen customer engagement and drive spend per user.
Strategic initiatives beyond core retail also gained traction. The Chewy Vet Care business now operates 11 clinics in four states, with plans to open 8-10 more in fiscal 2025. The company’s sponsored ads segment showed sequential growth, supported by an expanding ad offering. Meanwhile, the Chewy+ membership program has moved out of its beta phase and is showing early signs of success in boosting order frequency, engagement and cross-category penetration, adding value to Chewy’s ecosystem.
Despite these strengths, CHWY faces ongoing challenges that may impact future performance. The company delivered a fiscal first-quarter adjusted EBITDA margin of 6.2%, but management noted that this would likely represent the peak for the year, with margins expected to decline sequentially due to seasonality, and increased investment in marketing and strategic initiatives. Although tariff risks remain minimal, industry-wide price shifts, particularly in discretionary categories like hard goods, may affect demand.
Marketing and advertising expenses reached $193.8 million, or 6.2% of sales, and are expected to rise to the upper end of 6.7-6.8% for the year. Sustaining profitability will therefore depend on Chewy’s ability to maintain strong top-line growth in the face of rising costs.
The Case for CENT
Central Garden & Pet is making strategic strides to solidify its leadership in the U.S. pet and lawn and garden markets. Through its Central-to-home strategy, the company continues to enhance customer experience via investments in digital tools, supply-chain upgrades, and targeted marketing. These efforts are supported by an innovation-driven product pipeline, with new offerings in both pet and garden categories planned for fiscal 2025 and beyond, aligning with evolving consumer preferences and sustainability trends.
The ongoing success of the Cost and Simplicity program underscores Central Garden & Pet’s focus on operational excellence. The recent addition of direct-to-consumer capabilities at its upgraded Pennsylvania center, along with the consolidation of two older facilities into a new DTC hub in Salt Lake City, is streamlining logistics and improving efficiency. These infrastructure moves are not only boosting productivity but also enhancing employee safety and service levels to customers.
A key highlight in the second quarter of fiscal 2025 was the opening of a 300,000-square-foot dog and cat distribution center in New Jersey, which has centralized warehousing and improved fulfillment in a rapidly growing category. These structural improvements contributed to record fiscal second-quarter operating income in the Pet segment and drove a 150-basis-point expansion in the operating margin to 14.5%, reflecting the tangible impacts of Central’s efficiency initiatives.
Margin performance remains a standout, with the company achieving a 200-basis-point improvement in the adjusted gross margin to 33.3% during the fiscal second quarter, building on the gains from the previous quarter. This consistent margin expansion, despite a challenging retail backdrop, demonstrates Central Garden & Pet’s ability to manage costs effectively. For the fiscal year, the company anticipates a 90-basis-point year-over-year gross margin increase, highlighting continued discipline in execution.
E-commerce is another pillar of growth, with digital sales accounting for 27% of total Pet segment revenues in the fiscal second quarter. This was driven by product launches, higher conversion rates and enhanced retail media strategies. The Garden segment also saw strong digital momentum, particularly in the Wild Bird and Grass Seed categories. With top online market share in both, Central Garden & Pet is well-positioned to capitalize on the ongoing shift to online shopping, supported by its omnichannel strategy and robust digital presence.
Finally, Central Garden & Pet’s financial health remains solid, giving it the flexibility to pursue strategic initiatives and return capital to shareholders. The company ended the fiscal second quarter with $517 million in cash and zero borrowings under its $750-million credit facility. With a net leverage ratio of 1.7X, it continues to operate well below its target range. Shareholder value remains a priority, reflected in the repurchase of 1.2 million shares worth $41 million, with $63 million still authorized, affirming Central Garden & Pet’s disciplined capital allocation and long-term focus.
CHWY vs. CENT: How Do Estimates Stack Up?
The Zacks Consensus Estimate for Chewy’s fiscal 2025 sales and earnings per share (EPS) implies year-over-year growth of 5.2% and 23.1%, respectively. The consensus estimate for EPS for the current fiscal year has increased by 5 cents in the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CENT’s fiscal 2025 sales and EPS suggests a year-over-year decline of 1.7% and growth of 17.8%, respectively. The consensus estimate for EPS for the current fiscal year has moved up by 16 cents in the past 30 days.
Image Source: Zacks Investment Research
CHWY vs. CENT: A Look at Stock Performances
Chewy’s shares have gained 1% over the past three months. Meanwhile, Central Garden & Pet’s stock has risen 19.6%. While CHWY’s modest gain reflects investor caution around near-term margin pressures, leadership transition and e-commerce volatility, CENT’s outperformance is driven by strong margin expansion, disciplined cost execution and resilient Pet segment profitability.
Image Source: Zacks Investment Research
CHWY vs. CENT: A Dive Into Stock Valuation
Chewy is trading at a forward price-to-sales (P/S) multiple of 1.20, above its median of 1.13 in the last three years. Central Garden & Pet’s forward 12-month P/S multiple sits at 0.85, above its median of 0.72 in the last three years.
The CENT stock looks attractive from a valuation perspective, offering compelling entry points for value-conscious investors. Moreover, with ongoing cost optimization and footprint consolidation, the company is well-positioned to sustain margin gains. We note that Chewy appears to be pricier than CENT in terms of their current P/S ratios.
Image Source: Zacks Investment Research
CHWY vs. CENT: Which is the Smarter Bet?
While both companies are navigating shifting consumer trends and macroeconomic headwinds, Central Garden & Pet stands out as the better investment case today. Its disciplined cost management, consistent margin expansion and strong execution in its Pet segment position CENT well for steady earnings performance. The company’s focus on operational efficiency, digital growth and capital returns supports a compelling value thesis.
In contrast, while Chewy offers strong long-term potential through its digital-first model and recurring revenue streams, it faces near-term margin pressures, increased marketing spend and execution risks tied to its expansion initiatives. With a more attractive valuation, stable fundamentals, and a proven ability to navigate uncertainty, Central Garden & Pet offers a more favorable risk-reward profile at this stage.
CHWY currently carries a Zacks Rank #3 (Hold), whereas CENT flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.