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Chewy vs. Petco: Which Pet-Care Stock Looks Better Positioned?
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Key Takeaways
CHWY's Autoship model accounted for more than 83% of fiscal 2025 sales.
WOOF is expanding veterinary, grooming and private-label offerings through its turnaround plan.
CHWY expects AI initiatives to deliver more than $50M in annualized savings by fiscal 2027.
Chewy, Inc. (CHWY - Free Report) and Petco Health and Wellness (WOOF - Free Report) are two major players in the pet-care industry, each pursuing distinct strategies to capture growth in an evolving market.
Chewy, with a market capitalization of nearly $9 billion, has established itself as a leading digital-first pet-care platform, supported by its high-recurring Autoship subscription model, expanding veterinary and pharmacy ecosystem, robust fulfillment infrastructure and growing private-label portfolio. The company serves more than 21 million active customers, supported by a nationwide fulfillment network that enables high recurring revenues and strong customer engagement.
In contrast, Petco, with a market capitalization of roughly $856.8 million, is focused on accelerating its turnaround through its integrated retail and services ecosystem. The company operates more than 1,380 stores across the United States and continues to expand its veterinary, grooming and training services while improving store productivity and omnichannel engagement.
As both companies balance growth investments with profitability improvement, investors are evaluating which pet-care stock appears better positioned for sustained long-term upside.
The Case for CHWY
Chewy continues to strengthen its position within the digital pet-care industry through consistent market share gains, rising customer engagement and a resilient recurring revenue model. The company benefits from stable demand trends driven by repeat purchases, premiumization and consumers’ growing preference for convenient online solutions.
A major growth driver for Chewy remains its Autoship platform, which accounted for more than 83% of fiscal 2025 sales and continues to grow faster than overall revenues. The subscription-based model improves revenue visibility, strengthens customer retention and supports higher lifetime customer value, while growth in health, wellness and veterinary categories is driving higher spending per active customer.
Chewy is also leveraging technology as a core differentiator. The company has built an integrated data platform and is embedding AI across customer service, fulfillment, pharmacy and marketing operations to enhance personalization and operational efficiency. These initiatives are expected to deliver low tens of millions of dollars in savings in fiscal 2026, with a path to more than $50 million in annualized benefits by fiscal 2027, highlighting a clear opportunity for scalable efficiency gains.
At the same time, the company continues expanding its healthcare ecosystem through Chewy Vet Care and strategic acquisitions. Chewy recently announced the acquisition of Modern Animal, a technology-enabled veterinary platform with 29 clinics and more than 100,000 member families, which will expand Chewy’s veterinary footprint from 18 to 47 locations nationwide and add more than $125 million in annualized run-rate revenue. The deal is expected to strengthen customer engagement, increase spending per active customer and accelerate Chewy’s position as an integrated pet healthcare platform.
In parallel, the rollout of Chewy Made and broader private-label expansion is increasing the company’s exposure to consumables and supporting long-term margin improvement. Looking ahead, Chewy expects fiscal 2026 net sales of $13.6-$13.75 billion, representing 8-9% growth, alongside another year of meaningful adjusted EBITDA margin expansion. Supported by strong free cash flow generation, a debt-free balance sheet and multiple structural growth drivers, Chewy appears well-positioned to sustain profitable long-term growth.
The Case for WOOF
Petco is strengthening its position within the pet-care industry through operational discipline and a renewed focus on sustainable growth initiatives. The company spent fiscal 2025 rebuilding its retail fundamentals, optimizing its economic model and improving cash generation, while also reducing its leverage ratio and enhancing financial flexibility.
A major part of Petco’s strategy is its “Reach for the Sky” transformation plan, which focuses on product innovation, service expansion, customer engagement and omnichannel growth. Management believes the company’s integrated ecosystem of stores, veterinary hospitals, grooming, training and digital capabilities provides a differentiated competitive advantage that can drive higher customer retention and long-term spending growth.
Petco is also expanding into consumables and fresh food, one of the fastest-growing areas in pet care. The company is increasing freezer capacity across stores, adding new national brands and increasing the frequency of product launches to drive customer engagement and repeat visits. At the same time, Petco continues expanding its private-label portfolio, which already represents roughly 20% of sales and generates significantly higher margins than national brands.
Services remain another important differentiator for Petco. The company operates approximately 300 veterinary hospitals alongside grooming, training and vaccination services, helping deepen customer relationships and improve spending per customer. Management noted that customers engaging across multiple services and channels generate spending levels roughly five times higher than other customers, highlighting the long-term value of its integrated ecosystem.
Petco is also investing in store productivity, loyalty initiatives and omnichannel capabilities to improve traffic, basket size and repeat purchases. Looking ahead, the company expects fiscal 2026 net sales to range from flat to up 1.5%, reflecting gradual improvement as its strategic initiatives continue to scale.
How Does the Zacks Consensus Estimate Compare for CHWY & WOOF?
The Zacks Consensus Estimate for Chewy’s current fiscal-year sales and EPS implies growth of 8.6% and 28.4%, respectively, from the year-ago period’s actuals. For the next fiscal year, the consensus estimate indicates an 8.1% rise in sales and 23.1% growth in earnings. The consensus estimate for EPS for the current fiscal year has increased 7 cents to $1.63 over the past 60 days, while for the next fiscal year, it has improved by 12 cents to $2.00.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Petco’s current fiscal-year sales and EPS implies a growth of 1% and 58.3%, respectively, from the year-ago period’s actuals. For the next fiscal year, the consensus estimate indicates a 2.7% rise in sales and 21.1% growth in earnings. The consensus estimate for EPS for the current and next fiscal year has been unchanged at 19 cents and 23 cents, respectively, over the past 60 days.
Image Source: Zacks Investment Research
Assessing Recent Stock Performances of CHWY & WOOF
Chewy’s shares have lost 24.4% over the past three months. Meanwhile, Petco’s stock has gained 3.9%.
Image Source: Zacks Investment Research
Dive Into Stock Valuations of CHWY & WOOF
Chewy is trading at a forward price-to-sales (P/S) multiple of 0.62, down from its median of 0.99 in the last three years. Petco’s forward 12-month P/S multiple sits at 0.14, down from its median of 0.17 in the last three years.
Image Source: Zacks Investment Research
CHWY or WOOF: Which Offers Greater Potential?
Chewy emerges as the stronger investment candidate, supported by its digital-first platform, highly recurring Autoship model and expanding ecosystem across veterinary care, pharmacy, private-label offerings and AI-driven capabilities. Its ability to drive consistent market share gains, increase spending per active customer and generate strong free cash flow positions the company for sustained long-term growth and continued margin expansion. In contrast, Petco is making progress through operational improvements, services expansion and turnaround initiatives, but its growth outlook remains more gradual amid competitive pressures, making it relatively less compelling for investors at present.
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Chewy vs. Petco: Which Pet-Care Stock Looks Better Positioned?
Key Takeaways
Chewy, Inc. (CHWY - Free Report) and Petco Health and Wellness (WOOF - Free Report) are two major players in the pet-care industry, each pursuing distinct strategies to capture growth in an evolving market.
Chewy, with a market capitalization of nearly $9 billion, has established itself as a leading digital-first pet-care platform, supported by its high-recurring Autoship subscription model, expanding veterinary and pharmacy ecosystem, robust fulfillment infrastructure and growing private-label portfolio. The company serves more than 21 million active customers, supported by a nationwide fulfillment network that enables high recurring revenues and strong customer engagement.
In contrast, Petco, with a market capitalization of roughly $856.8 million, is focused on accelerating its turnaround through its integrated retail and services ecosystem. The company operates more than 1,380 stores across the United States and continues to expand its veterinary, grooming and training services while improving store productivity and omnichannel engagement.
As both companies balance growth investments with profitability improvement, investors are evaluating which pet-care stock appears better positioned for sustained long-term upside.
The Case for CHWY
Chewy continues to strengthen its position within the digital pet-care industry through consistent market share gains, rising customer engagement and a resilient recurring revenue model. The company benefits from stable demand trends driven by repeat purchases, premiumization and consumers’ growing preference for convenient online solutions.
A major growth driver for Chewy remains its Autoship platform, which accounted for more than 83% of fiscal 2025 sales and continues to grow faster than overall revenues. The subscription-based model improves revenue visibility, strengthens customer retention and supports higher lifetime customer value, while growth in health, wellness and veterinary categories is driving higher spending per active customer.
Chewy is also leveraging technology as a core differentiator. The company has built an integrated data platform and is embedding AI across customer service, fulfillment, pharmacy and marketing operations to enhance personalization and operational efficiency. These initiatives are expected to deliver low tens of millions of dollars in savings in fiscal 2026, with a path to more than $50 million in annualized benefits by fiscal 2027, highlighting a clear opportunity for scalable efficiency gains.
At the same time, the company continues expanding its healthcare ecosystem through Chewy Vet Care and strategic acquisitions. Chewy recently announced the acquisition of Modern Animal, a technology-enabled veterinary platform with 29 clinics and more than 100,000 member families, which will expand Chewy’s veterinary footprint from 18 to 47 locations nationwide and add more than $125 million in annualized run-rate revenue. The deal is expected to strengthen customer engagement, increase spending per active customer and accelerate Chewy’s position as an integrated pet healthcare platform.
In parallel, the rollout of Chewy Made and broader private-label expansion is increasing the company’s exposure to consumables and supporting long-term margin improvement. Looking ahead, Chewy expects fiscal 2026 net sales of $13.6-$13.75 billion, representing 8-9% growth, alongside another year of meaningful adjusted EBITDA margin expansion. Supported by strong free cash flow generation, a debt-free balance sheet and multiple structural growth drivers, Chewy appears well-positioned to sustain profitable long-term growth.
The Case for WOOF
Petco is strengthening its position within the pet-care industry through operational discipline and a renewed focus on sustainable growth initiatives. The company spent fiscal 2025 rebuilding its retail fundamentals, optimizing its economic model and improving cash generation, while also reducing its leverage ratio and enhancing financial flexibility.
A major part of Petco’s strategy is its “Reach for the Sky” transformation plan, which focuses on product innovation, service expansion, customer engagement and omnichannel growth. Management believes the company’s integrated ecosystem of stores, veterinary hospitals, grooming, training and digital capabilities provides a differentiated competitive advantage that can drive higher customer retention and long-term spending growth.
Petco is also expanding into consumables and fresh food, one of the fastest-growing areas in pet care. The company is increasing freezer capacity across stores, adding new national brands and increasing the frequency of product launches to drive customer engagement and repeat visits. At the same time, Petco continues expanding its private-label portfolio, which already represents roughly 20% of sales and generates significantly higher margins than national brands.
Services remain another important differentiator for Petco. The company operates approximately 300 veterinary hospitals alongside grooming, training and vaccination services, helping deepen customer relationships and improve spending per customer. Management noted that customers engaging across multiple services and channels generate spending levels roughly five times higher than other customers, highlighting the long-term value of its integrated ecosystem.
Petco is also investing in store productivity, loyalty initiatives and omnichannel capabilities to improve traffic, basket size and repeat purchases. Looking ahead, the company expects fiscal 2026 net sales to range from flat to up 1.5%, reflecting gradual improvement as its strategic initiatives continue to scale.
How Does the Zacks Consensus Estimate Compare for CHWY & WOOF?
The Zacks Consensus Estimate for Chewy’s current fiscal-year sales and EPS implies growth of 8.6% and 28.4%, respectively, from the year-ago period’s actuals. For the next fiscal year, the consensus estimate indicates an 8.1% rise in sales and 23.1% growth in earnings. The consensus estimate for EPS for the current fiscal year has increased 7 cents to $1.63 over the past 60 days, while for the next fiscal year, it has improved by 12 cents to $2.00.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Petco’s current fiscal-year sales and EPS implies a growth of 1% and 58.3%, respectively, from the year-ago period’s actuals. For the next fiscal year, the consensus estimate indicates a 2.7% rise in sales and 21.1% growth in earnings. The consensus estimate for EPS for the current and next fiscal year has been unchanged at 19 cents and 23 cents, respectively, over the past 60 days.
Image Source: Zacks Investment Research
Assessing Recent Stock Performances of CHWY & WOOF
Chewy’s shares have lost 24.4% over the past three months. Meanwhile, Petco’s stock has gained 3.9%.
Image Source: Zacks Investment Research
Dive Into Stock Valuations of CHWY & WOOF
Chewy is trading at a forward price-to-sales (P/S) multiple of 0.62, down from its median of 0.99 in the last three years. Petco’s forward 12-month P/S multiple sits at 0.14, down from its median of 0.17 in the last three years.
Image Source: Zacks Investment Research
CHWY or WOOF: Which Offers Greater Potential?
Chewy emerges as the stronger investment candidate, supported by its digital-first platform, highly recurring Autoship model and expanding ecosystem across veterinary care, pharmacy, private-label offerings and AI-driven capabilities. Its ability to drive consistent market share gains, increase spending per active customer and generate strong free cash flow positions the company for sustained long-term growth and continued margin expansion. In contrast, Petco is making progress through operational improvements, services expansion and turnaround initiatives, but its growth outlook remains more gradual amid competitive pressures, making it relatively less compelling for investors at present.
CHWY and WOOF currently carry a Zacks Rank #3 (Hold) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.