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Is Chewy's Multi-Segment Approach the Formula for Scalable Growth?
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Key Takeaways
CHWY Q1 net sales rose 8.3% YoY to $3.12B, beating guidance on strength in all major business segments.
Autoship accounted for 82.2% of sales, climbing 14.8% YoY and driving recurring revenue and loyalty gains.
Chewy+ doption and Vet Care expansion lifted customer spend, with net sales per active user up 3.7%.
Chewy Inc. (CHWY - Free Report) delivered a strong and well-rounded performance across all major segments in the first quarter of fiscal 2025. Net sales rose 8.3% year over year to $3.12 billion, exceeding the high end of guidance, driven by robust engagement in core consumables and health and wellness categories. Hardgoods also performed well, growing 12.3% year over year, supported by refreshed assortments, faster SKU onboarding and an improved customer experience.
The Autoship program continued to be a key growth driver, generating $2.56 billion in sales, or 82.2% of total net sales. With nearly 14.8% year-over-year growth, it reinforced Chewy’s strengths in customer loyalty and recurring revenues. Active customers rose to 20.8 million, up 3.8%, with gains driven by strong customer acquisition and reduced churn.
Chewy Vet Care (“CVC”) expanded to 11 clinics across four states and exceeded expectations in customer utilization. About half of first-time CVC customers placed an order on Chewy.com within 30 days, highlighting the synergy between services and retail. Meanwhile, the sponsored ads segment grew steadily, aided by the launch of a new first-party platform and off-site advertising capabilities.
The Chewy+ membership program, recently launched beyond its beta phase, showed promising adoption. Members displayed stronger engagement, increased purchase frequency and broader category penetration. This helped push net sales per active customer up 3.7% year over year to $583.
Chewy maintained its fiscal 2025 revenue guidance of $12.3 billion to $12.45 billion, representing 6-7% growth when adjusted for the prior year’s extra week. Overall, the company’s segment performance reflects effective execution, strong customer engagement and a solid foundation for sustained growth.
How Do CENT & WOOF Stack Up Against CHWY’s Sales Growth?
Chewy's net sales have outperformed those of its key competitors, including Central Garden & Pet Company (CENT - Free Report) and Petco Health and Wellness Company, Inc. (WOOF - Free Report) .
Central Garden & Pet reported second-quarter fiscal 2025 net sales of $833.5 million, down 7.4% year over year, impacted by weather delays and the loss of two product lines. Despite this, Central Garden & Pet saw strong performance in its Wild Bird and e-commerce businesses helped offset broader sales softness.
Petco Health and Wellness reported first-quarter fiscal 2025 net sales of $1.49 billion, down 2.3% year over year due to store closures. Assuming stable tariff levels, Petco Health and Wellness expects 2025 net sales to decline in the low single digits and adjusted EBITDA between $375 million and $390 million.
CHWY’s Price Performance, Valuation & Estimates
Shares of Chewy have gained 8.4% year to date compared with the industry’s growth of 11.4%.
Image Source: Zacks Investment Research
From a valuation standpoint, CHWY trades at a forward price-to-sales ratio of 1.17X, below the industry’s average of 2.17X. It has a Value Score of B.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CHWY’s fiscal 2025 and 2026 earnings implies year-over-year growth of 23.1% and 19.5%, respectively. Estimates for fiscal 2025 have been revised upward by 5 cents, while the same for fiscal 2026 has been revised upward by 1 cent over the past 60 days.
Image: Bigstock
Is Chewy's Multi-Segment Approach the Formula for Scalable Growth?
Key Takeaways
Chewy Inc. (CHWY - Free Report) delivered a strong and well-rounded performance across all major segments in the first quarter of fiscal 2025. Net sales rose 8.3% year over year to $3.12 billion, exceeding the high end of guidance, driven by robust engagement in core consumables and health and wellness categories. Hardgoods also performed well, growing 12.3% year over year, supported by refreshed assortments, faster SKU onboarding and an improved customer experience.
The Autoship program continued to be a key growth driver, generating $2.56 billion in sales, or 82.2% of total net sales. With nearly 14.8% year-over-year growth, it reinforced Chewy’s strengths in customer loyalty and recurring revenues. Active customers rose to 20.8 million, up 3.8%, with gains driven by strong customer acquisition and reduced churn.
Chewy Vet Care (“CVC”) expanded to 11 clinics across four states and exceeded expectations in customer utilization. About half of first-time CVC customers placed an order on Chewy.com within 30 days, highlighting the synergy between services and retail. Meanwhile, the sponsored ads segment grew steadily, aided by the launch of a new first-party platform and off-site advertising capabilities.
The Chewy+ membership program, recently launched beyond its beta phase, showed promising adoption. Members displayed stronger engagement, increased purchase frequency and broader category penetration. This helped push net sales per active customer up 3.7% year over year to $583.
Chewy maintained its fiscal 2025 revenue guidance of $12.3 billion to $12.45 billion, representing 6-7% growth when adjusted for the prior year’s extra week. Overall, the company’s segment performance reflects effective execution, strong customer engagement and a solid foundation for sustained growth.
How Do CENT & WOOF Stack Up Against CHWY’s Sales Growth?
Chewy's net sales have outperformed those of its key competitors, including Central Garden & Pet Company (CENT - Free Report) and Petco Health and Wellness Company, Inc. (WOOF - Free Report) .
Central Garden & Pet reported second-quarter fiscal 2025 net sales of $833.5 million, down 7.4% year over year, impacted by weather delays and the loss of two product lines. Despite this, Central Garden & Pet saw strong performance in its Wild Bird and e-commerce businesses helped offset broader sales softness.
Petco Health and Wellness reported first-quarter fiscal 2025 net sales of $1.49 billion, down 2.3% year over year due to store closures. Assuming stable tariff levels, Petco Health and Wellness expects 2025 net sales to decline in the low single digits and adjusted EBITDA between $375 million and $390 million.
CHWY’s Price Performance, Valuation & Estimates
Shares of Chewy have gained 8.4% year to date compared with the industry’s growth of 11.4%.
Image Source: Zacks Investment Research
From a valuation standpoint, CHWY trades at a forward price-to-sales ratio of 1.17X, below the industry’s average of 2.17X. It has a Value Score of B.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CHWY’s fiscal 2025 and 2026 earnings implies year-over-year growth of 23.1% and 19.5%, respectively. Estimates for fiscal 2025 have been revised upward by 5 cents, while the same for fiscal 2026 has been revised upward by 1 cent over the past 60 days.
Image Source: Zacks Investment Research
CHWY currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.