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Chewy's Autoship Business Continues to Drive Recurring Revenue Growth
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Key Takeaways
Chewy's Autoship sales rose more than 10% y/y, exceeding overall net sales growth.
CHWY increased active customers to 21.5M, while net sales per active customer rose to $597.
Chewy expects Autoship to support long-term retention, recurring revenues and market-share gains.
Chewy, Inc.’s (CHWY - Free Report) Autoship business remained a key contributor to growth in the first quarter of fiscal 2026. Autoship customer sales increased more than 10% year over year to $2.83 billion and accounted for 84.4% of the total net sales. The growth rate exceeded the company’s overall net sales rise of 7.7%, demonstrating the continued strength of recurring purchases across the platform.
The program’s performance contributed to the total net sales of $3.36 billion during the quarter. Active customers increased 3.6% year over year to 21.5 million, while net sales per active customer rose to $597. Management stated that Autoship sales continued to outpace overall company growth, reinforcing the predictability, durability and recurring nature of Chewy’s revenue base.
According to management, consumables and healthcare categories, supported by the Autoship program, continued to perform well despite pressure on discretionary spending and premiumization trends. The company also noted that customer churn improved and reactivation rates remained healthy in the fiscal first quarter.
To further strengthen the platform, Chewy is investing in initiatives aimed at increasing product attachment rates within Autoship orders. The company expects these efforts to drive higher customer lifetime value over time, although macroeconomic pressures have tempered near-term spending on discretionary items. Management indicated that quarterly net customer additions are likely to trend toward the lower end of its previous target of 150,000-250,000 per quarter.
For fiscal 2026, Chewy expects net sales between $13.40 billion and $13.55 billion, indicating year-over-year growth of 6.3-7.5%. As the company expands its customer base and deepens engagement across the platform, Autoship is expected to remain a key driver of recurring revenue growth, customer retention and market-share gains over the long term.
CHWY’s Price Performance, Valuation & Estimates
Chewy, which competes with BARK, Inc. (BARK - Free Report) and Petco Health and Wellness Company, Inc. (WOOF - Free Report) , has fallen 26.3% in the past three months against the industry’s growth of 7.8%. Meanwhile, BARK shares have declined 39.1% and Petco has dipped 21.9%.
Image Source: Zacks Investment Research
From a valuation standpoint, CHWY trades at a trailing price-to-sales ratio of 0.62X, below the industry’s average of 2.15X. It has a Value Score of A. CHWY is trading at a premium to BARK (with a trailing 12-month P/S ratio of 0.20) and Petco (0.13).
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CHWY’s fiscal 2026 earnings implies year-over-year growth of 26.8%, whereas the same for fiscal 2027 indicates an uptick of 23.3%. Estimates for fiscal 2026 and 2027 have been revised downward by 2 cents each, respectively, in the past 30 days.
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Chewy's Autoship Business Continues to Drive Recurring Revenue Growth
Key Takeaways
Chewy, Inc.’s (CHWY - Free Report) Autoship business remained a key contributor to growth in the first quarter of fiscal 2026. Autoship customer sales increased more than 10% year over year to $2.83 billion and accounted for 84.4% of the total net sales. The growth rate exceeded the company’s overall net sales rise of 7.7%, demonstrating the continued strength of recurring purchases across the platform.
The program’s performance contributed to the total net sales of $3.36 billion during the quarter. Active customers increased 3.6% year over year to 21.5 million, while net sales per active customer rose to $597. Management stated that Autoship sales continued to outpace overall company growth, reinforcing the predictability, durability and recurring nature of Chewy’s revenue base.
According to management, consumables and healthcare categories, supported by the Autoship program, continued to perform well despite pressure on discretionary spending and premiumization trends. The company also noted that customer churn improved and reactivation rates remained healthy in the fiscal first quarter.
To further strengthen the platform, Chewy is investing in initiatives aimed at increasing product attachment rates within Autoship orders. The company expects these efforts to drive higher customer lifetime value over time, although macroeconomic pressures have tempered near-term spending on discretionary items. Management indicated that quarterly net customer additions are likely to trend toward the lower end of its previous target of 150,000-250,000 per quarter.
For fiscal 2026, Chewy expects net sales between $13.40 billion and $13.55 billion, indicating year-over-year growth of 6.3-7.5%. As the company expands its customer base and deepens engagement across the platform, Autoship is expected to remain a key driver of recurring revenue growth, customer retention and market-share gains over the long term.
CHWY’s Price Performance, Valuation & Estimates
Chewy, which competes with BARK, Inc. (BARK - Free Report) and Petco Health and Wellness Company, Inc. (WOOF - Free Report) , has fallen 26.3% in the past three months against the industry’s growth of 7.8%. Meanwhile, BARK shares have declined 39.1% and Petco has dipped 21.9%.
Image Source: Zacks Investment Research
From a valuation standpoint, CHWY trades at a trailing price-to-sales ratio of 0.62X, below the industry’s average of 2.15X. It has a Value Score of A. CHWY is trading at a premium to BARK (with a trailing 12-month P/S ratio of 0.20) and Petco (0.13).
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CHWY’s fiscal 2026 earnings implies year-over-year growth of 26.8%, whereas the same for fiscal 2027 indicates an uptick of 23.3%. Estimates for fiscal 2026 and 2027 have been revised downward by 2 cents each, respectively, in the past 30 days.
Image Source: Zacks Investment Research
CHWY currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.