Can Chewy Maintain Its Momentum in Active Customer Growth?

Chewy CHWY demonstrated a noticeable acceleration in active customer growth in the first quarter of fiscal 2025, reflecting the success of its ongoing customer acquisition and retention strategies. The company closed the quarter with 20.8 million active customers, a 3.8% year-over-year increase, and added approximately 240,000 customers sequentially.The growth was supported by a combination of robust gross customer additions and a meaningful reduction in churn, indicating that Chewy is not only bringing in more customers but also retaining them more effectively.Management noted that the quality of new customer cohorts has significantly improved, demonstrated by higher reorder rates and increased customer spending levels. This is further reflected in the company’s financial performance, with net sales rising 8.3% year over year to $3.12 billion for the fiscal first quarter.Net Sales Per Active Customer rose 3.7% year-over-year to $583, signaling stronger engagement. Growth drivers include the continued expansion of Autoship subscriptions, the broader adoption of healthcare services like pharmacy and vet clinics, and the full-scale launch of the Chewy+ paid membership program.Chewy reaffirmed its expectation of low-single-digit active customer growth for fiscal 2025 but acknowledged that the current trajectory points toward the higher end of that range. The company also maintained its full-year revenue guidance between $12.3 billion and $12.45 billion, implying 6-7% year-over-year growth, adjusted for the extra 53rd week in fiscal 2024.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 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, helping 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. Petco Health and Wellness expects 2025 net sales to decline in the low-single digits and adjusted EBITDA between $375 million and $390 million, assuming stable tariff levels.CHWY’s Price Performance, Valuation & EstimatesShares of Chewy have gained 27.3% year to date compared with the industry’s growth of 7.7%. Image Source: Zacks Investment Research From a valuation standpoint, CHWY trades at a forward price-to-sales ratio of 1.38X, below the industry’s average of 2.02X. 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 10.3%, whereas the same for fiscal 2026 indicates an uptick of 7.3%. Estimates for fiscal 2025 and 2026 have been unchanged in the past 30 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.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See 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