Can Chewy Continue to Build Momentum in Active Customer Expansion?

Chewy, Inc. CHWY sustained strong momentum in active customer expansion in the second quarter of fiscal 2025, underscoring the strength of its engagement and retention strategies. The company closed the quarter with 20.9 million active customers, a 4.5% year-over-year increase, signaling effective customer acquisition and rising loyalty among existing users.Growth was led by the continued success of the Autoship subscription model. Autoship customer sales reached $2.58 billion, representing 83% of the total second-quarter net sales and increasing nearly 15% year over year. Autoship customers remain Chewy’s most valuable segment, driving higher reorder rates and deeper engagement across product categories. Net Sales Per Active Customer rose 4.6% year over year to $591, reflecting stronger customer spending patterns and share-of-wallet gains.Chewy’s paid membership program, Chewy+, also outperformed expectations. Approximately 3% of monthly sales now stem from Chewy+ members, who exhibit higher purchase frequency, average order value, and loyalty compared to non-members. Management anticipates the program to contribute revenues in the mid-single-digit range by the year-end, adding to overall sales momentum and profitability.The launch of “Get Real,” Chewy’s exclusive fresh dog food brand, expanded the company’s private-label portfolio and capitalized on the growing demand for premium and fresh pet nutrition. Early feedback has been positive, reinforcing Chewy’s strategy of offering differentiated, high-margin products.Looking ahead, management remains confident in sustaining active customer growth through investments in Autoship, Chewy+ and private brands. With the full-year revenue guidance raised to $12.5-$12.6 billion, or 7-8% growth excluding last year’s 53rd week, Chewy appears well-positioned for robust expansion in the pet care industry.How Do CENT & WOOF Stack Up Against CHWY’s Sales GrowthChewy's net sales have outperformed those of its key competitors, including Central Garden & Pet Company CENT and Petco Health and Wellness Company, Inc. WOOF.Central Garden & Pet reported third-quarter fiscal 2025 net sales of $961 million, down 4% year over year, primarily reflecting the exit of two product lines in its Garden distribution business, extended periods of cool and rainy weather, and continued softness in pet durables. Growth in Wild Bird, Fertilizer and Packet Seeds categories, along with double-digit e-commerce gains, helped offset Central Garden & Pet’s broader sales declines.Petco Health and Wellness reported second-quarter fiscal 2025 net sales of $1.49 billion, down 2.3% year over year, reflecting the impacts of store closures and the exit from unprofitable sales. Comparable sales declined 1.4%, while adjusted EBITDA of Petco Health and Wellness increased $30 million to $114 million, expanding nearly 220 basis points to 7.6% of sales.CHWY’s Price Performance, Valuation & EstimatesShares of Chewy have gained 4.8% year to date compared with the industry’s growth of 9.7%. Image Source: Zacks Investment Research From a valuation standpoint, CHWY trades at a trailing price-to-sales ratio of 1.22X, below the industry’s average of 2.69X. It has a Value Score of C. Image Source: Zacks Investment Research The Zacks Consensus Estimate for CHWY’s fiscal 2025 earnings implies year-over-year growth of 22.1%, whereas the same for fiscal 2026 indicates an uptick of 20.8%. Estimates for fiscal 2025 and 2026 have been unchanged and revised upward by one cent, respectively, in the past seven 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.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. Little-known AI firms tackling the world's biggest problems may be more lucrative in the coming months and years.See "2nd Wave" AI stocks now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Central Garden & Pet Company (CENT): Free Stock Analysis Report Petco Health and Wellness Company, Inc. (WOOF): Free Stock Analysis Report Chewy (CHWY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks