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Posted On: 05/19/2025 5:15:25 PM
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Investors' Business Daily
Chewy Stock Fetches Support For Online Leader Amid 'Recession-Resilient' Pet Spending
Chewy stock has rallied 150% in the past 12 months and the company returned last year to adding new customers.
Even if American shoppers cut back overall, it is a good bet that pet parents will keep spending generously on their furry friends. Or at least that's the view on Wall Street that has kept Chewy (CHWY) stock on a comeback trajectory this year.
After a rough (ruff?) run, Chewy rallied more than 150% over the past 12 months. That's in part because the shopping website for pet lovers recently returned to growing its customer base after a post-pandemic cooling off. Chewy's 2025 sales are projected to reach $12.4 billion, with the company maintaining a positive overall outlook despite broader economic uncertainty.
<<<<<<<<<<How To Find Winners Without Risking Too Much
"I don't think any industry is recession-proof," Chewy Chief Financial Officer David Reeder said at a May 14 investor conference hosted by JPMorgan. "But if there is an industry that is recession-resilient, it is pet.">>>>>>>>>>>>
That view may be growing in popularity among investors. Chewy stock is ahead 25% so far this year, easily outpacing the S&P 500. Shares of the shopping site for pet lovers have held steady overall this year as many U.S. e-commerce stocks, including Amazon.com (AMZN), made dramatic swings in response to tariffs enacted and then eased by President Donald Trump.
Chewy stock broke out above a cup-with-handle base buy point of 37.91 on May 9. But Plantation, Fla.-based Chewy's rally will be tested by a first-quarter earnings report due early next month.
Chewy Stock: The Dog Days Are Over?
The recent action for Chewy stock offers further proof it is out of Wall Street's doghouse after a prolonged slump that started in 2021 and ran through last spring.
The company's fiscal fourth-quarter results in late March helped win further support.
Adjusted earnings for the January-ended period increased a better-than-expected 56% to 28 cents per share. Sales grew 15% to $3.25 billion, also beating the average FactSet estimate of $3.2 billion.
The number of active customers grew 2.1% year over year to 20.5 million. That marked the first quarter of customer growth in two years. Chewy also told investors it expects low-single-digit active customer growth for its current January 2026-ended fiscal 2025.
Chewy stock closed 1% lower following the fiscal fourth-quarter report. But commentary from analysts was largely positive. JPMorgan analyst Doug Anmuth reiterated an overweight call for Chewy stock following the report.
"While the broader pet industry is expected to grow 3.5% to 4.5% in fiscal year 2025, we believe Chewy continues to gain share," Anmuth wrote in a report. Anmuth added that Chewy is already the market leader for online pet products, with roughly 33% market share.
Chewy's Pandemic Growth Spurt
Founded in 2011 in Florida, Chewy steadily built up market share as pet parents — including millennials adopting cats and dogs as they reached adulthood — shifted to buying treats, food and medication online. PetSmart acquired Chewy for $3.4 billion in 2017, a record e-commerce acquisition at the time.
PetSmart spun Chewy out through a June 2019 initial public offering on the New York Stock Exchange at 22 per share.
chewy
Less than a year later, the Covid-19 pandemic catapulted Chewy to new levels of popularity.
Chewy's active customer total rocketed 42.7% to 19.2 million for its 2020 fiscal year, which ended late in January 2021. Sales grew 47% to $7.2 billion.
But Chewy — similar to other pandemic-fueled businesses like Zoom Communications (ZM) and Etsy (ETSY) — struggled in 2022 and 2023 as the conditions of Covid-19 eased. Active customers declined 1.2% for fiscal 2022 and declined another 1.6% for fiscal 2023.
Chewy stock peaked at near 119 in February 2021 before slumping more than 85% to a record low of 14.69 on April 25 of last year.
Chewy Stock Gains Support On Wall Street
But Chewy's return to customer growth and accelerating revenue in recent quarters helped it win more backers on Wall Street. Roughly two-thirds of the 33 analysts following Chewy stock rank it as a buy, according to FactSet. The rest hold neutral calls. That's an improvement from October, when 47% of analysts held a buy call for Chewy.
William Blair analyst Dylan Carden holds an outperform, or buy, call. He wrote in a recent client note that the company is "well-positioned following a decisive inflection in active customers over the last two quarters."
BofA Securities analysts hold a buy call on Chewy stock as well, and recently noted less than 10% of Chewy's products come from China, helping lessen its exposure to tariffs.
"We see Chewy as the best positioned SMID (small- and midsize) Internet stock given: 1) minimum discretionary exposure; 2) low price elasticity for pet owners; 3) minimum tariff exposure, and; 4) sticky revenues due to Chewy's Autoship service," BofA analyst Curtis Nagle wrote to clients last month.
Chewy's Autoship offers discounts on items if customers sign up for recurring deliveries, such as for food or treats. Roughly 80% of Chewy's revenue last year came from Autoship payments, according to its most recent earnings report.
U.S. Spending On Pets Seen Reaching $157 Billion
chewyStill, Chewy operates in an overall market that has slowed from its 2020 and 2021 boom. The overall market for U.S. pet products is expected to grow 3.4% to $157 billion this year, according to estimates from the American Pet Products Association. That's far from the 19.3% growth of 2021.
But the 2025 projections would represent a slight acceleration after four straight years where the growth rate slowed. And more of that spending is moving online. About 39% of pet spending in the U.S. came through online sources last year, according to the research firm Packaged Facts. That's up from 24% online penetration in 2019.
Reeder said at the JPMorgan conference that the company doesn't expect Americans to shift all their shopping for pet products online. But the company sees room for a greater shift.
"And as that market moves online, Chewy is disproportionately a winner of every dollar," Reeder said.
Chewy Earnings Preview
The next big test for Chewy's bounce-back comes June 11. The company will report earnings for its April-ended fiscal first quarter.
Analysts polled by FactSet project Chewy's adjusted earnings will increase 6.5% to 34 cents per share. Revenue is seen rising 7% to $3.08 billion.
Wall Street is also forecasting another quarter of active customer growth, with total Chewy purchasers projected to rise 3% year over year to 20.6 million.
Chewy Stock Nearly Top Dog In E-Commerce Group
The rally for Chewy stock took a brief breather on May 13 news that Reeder, Chewy's CFO, would be leaving in a few months for a chief executive role at a semiconductor company. But Chewy affirmed its fiscal first-quarter guidance in announcing Reeder's departure. The stock bounced back the next day and is ahead 9% overall in May.
Chewy did not respond to a request for further comment.
Meanwhile, Chewy stock ranks fourth out of 59 stocks in IBD's internet retail industry group, according to IBD Stock Checkup.
Chewy has an IBD Composite Rating of 98 out of 99. The Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
Chewy stock has an IBD Accumulation/Distribution Rating of B, indicating slightly more institutional buying of shares than selling. It has an IBD Relative Strength Rating of 96 out of 99. The Relative Strength Rating shows how a stock's price performance stacks up against all other stocks over the last 52 weeks.
I see THIS is a good sign of things to come.
Go Biel
Chewy Stock Fetches Support For Online Leader Amid 'Recession-Resilient' Pet Spending
Chewy stock has rallied 150% in the past 12 months and the company returned last year to adding new customers.
Even if American shoppers cut back overall, it is a good bet that pet parents will keep spending generously on their furry friends. Or at least that's the view on Wall Street that has kept Chewy (CHWY) stock on a comeback trajectory this year.
After a rough (ruff?) run, Chewy rallied more than 150% over the past 12 months. That's in part because the shopping website for pet lovers recently returned to growing its customer base after a post-pandemic cooling off. Chewy's 2025 sales are projected to reach $12.4 billion, with the company maintaining a positive overall outlook despite broader economic uncertainty.
<<<<<<<<<<How To Find Winners Without Risking Too Much
"I don't think any industry is recession-proof," Chewy Chief Financial Officer David Reeder said at a May 14 investor conference hosted by JPMorgan. "But if there is an industry that is recession-resilient, it is pet.">>>>>>>>>>>>
That view may be growing in popularity among investors. Chewy stock is ahead 25% so far this year, easily outpacing the S&P 500. Shares of the shopping site for pet lovers have held steady overall this year as many U.S. e-commerce stocks, including Amazon.com (AMZN), made dramatic swings in response to tariffs enacted and then eased by President Donald Trump.
Chewy stock broke out above a cup-with-handle base buy point of 37.91 on May 9. But Plantation, Fla.-based Chewy's rally will be tested by a first-quarter earnings report due early next month.
Chewy Stock: The Dog Days Are Over?
The recent action for Chewy stock offers further proof it is out of Wall Street's doghouse after a prolonged slump that started in 2021 and ran through last spring.
The company's fiscal fourth-quarter results in late March helped win further support.
Adjusted earnings for the January-ended period increased a better-than-expected 56% to 28 cents per share. Sales grew 15% to $3.25 billion, also beating the average FactSet estimate of $3.2 billion.
The number of active customers grew 2.1% year over year to 20.5 million. That marked the first quarter of customer growth in two years. Chewy also told investors it expects low-single-digit active customer growth for its current January 2026-ended fiscal 2025.
Chewy stock closed 1% lower following the fiscal fourth-quarter report. But commentary from analysts was largely positive. JPMorgan analyst Doug Anmuth reiterated an overweight call for Chewy stock following the report.
"While the broader pet industry is expected to grow 3.5% to 4.5% in fiscal year 2025, we believe Chewy continues to gain share," Anmuth wrote in a report. Anmuth added that Chewy is already the market leader for online pet products, with roughly 33% market share.
Chewy's Pandemic Growth Spurt
Founded in 2011 in Florida, Chewy steadily built up market share as pet parents — including millennials adopting cats and dogs as they reached adulthood — shifted to buying treats, food and medication online. PetSmart acquired Chewy for $3.4 billion in 2017, a record e-commerce acquisition at the time.
PetSmart spun Chewy out through a June 2019 initial public offering on the New York Stock Exchange at 22 per share.
chewy
Less than a year later, the Covid-19 pandemic catapulted Chewy to new levels of popularity.
Chewy's active customer total rocketed 42.7% to 19.2 million for its 2020 fiscal year, which ended late in January 2021. Sales grew 47% to $7.2 billion.
But Chewy — similar to other pandemic-fueled businesses like Zoom Communications (ZM) and Etsy (ETSY) — struggled in 2022 and 2023 as the conditions of Covid-19 eased. Active customers declined 1.2% for fiscal 2022 and declined another 1.6% for fiscal 2023.
Chewy stock peaked at near 119 in February 2021 before slumping more than 85% to a record low of 14.69 on April 25 of last year.
Chewy Stock Gains Support On Wall Street
But Chewy's return to customer growth and accelerating revenue in recent quarters helped it win more backers on Wall Street. Roughly two-thirds of the 33 analysts following Chewy stock rank it as a buy, according to FactSet. The rest hold neutral calls. That's an improvement from October, when 47% of analysts held a buy call for Chewy.
William Blair analyst Dylan Carden holds an outperform, or buy, call. He wrote in a recent client note that the company is "well-positioned following a decisive inflection in active customers over the last two quarters."
BofA Securities analysts hold a buy call on Chewy stock as well, and recently noted less than 10% of Chewy's products come from China, helping lessen its exposure to tariffs.
"We see Chewy as the best positioned SMID (small- and midsize) Internet stock given: 1) minimum discretionary exposure; 2) low price elasticity for pet owners; 3) minimum tariff exposure, and; 4) sticky revenues due to Chewy's Autoship service," BofA analyst Curtis Nagle wrote to clients last month.
Chewy's Autoship offers discounts on items if customers sign up for recurring deliveries, such as for food or treats. Roughly 80% of Chewy's revenue last year came from Autoship payments, according to its most recent earnings report.
U.S. Spending On Pets Seen Reaching $157 Billion
chewyStill, Chewy operates in an overall market that has slowed from its 2020 and 2021 boom. The overall market for U.S. pet products is expected to grow 3.4% to $157 billion this year, according to estimates from the American Pet Products Association. That's far from the 19.3% growth of 2021.
But the 2025 projections would represent a slight acceleration after four straight years where the growth rate slowed. And more of that spending is moving online. About 39% of pet spending in the U.S. came through online sources last year, according to the research firm Packaged Facts. That's up from 24% online penetration in 2019.
Reeder said at the JPMorgan conference that the company doesn't expect Americans to shift all their shopping for pet products online. But the company sees room for a greater shift.
"And as that market moves online, Chewy is disproportionately a winner of every dollar," Reeder said.
Chewy Earnings Preview
The next big test for Chewy's bounce-back comes June 11. The company will report earnings for its April-ended fiscal first quarter.
Analysts polled by FactSet project Chewy's adjusted earnings will increase 6.5% to 34 cents per share. Revenue is seen rising 7% to $3.08 billion.
Wall Street is also forecasting another quarter of active customer growth, with total Chewy purchasers projected to rise 3% year over year to 20.6 million.
Chewy Stock Nearly Top Dog In E-Commerce Group
The rally for Chewy stock took a brief breather on May 13 news that Reeder, Chewy's CFO, would be leaving in a few months for a chief executive role at a semiconductor company. But Chewy affirmed its fiscal first-quarter guidance in announcing Reeder's departure. The stock bounced back the next day and is ahead 9% overall in May.
Chewy did not respond to a request for further comment.
Meanwhile, Chewy stock ranks fourth out of 59 stocks in IBD's internet retail industry group, according to IBD Stock Checkup.
Chewy has an IBD Composite Rating of 98 out of 99. The Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
Chewy stock has an IBD Accumulation/Distribution Rating of B, indicating slightly more institutional buying of shares than selling. It has an IBD Relative Strength Rating of 96 out of 99. The Relative Strength Rating shows how a stock's price performance stacks up against all other stocks over the last 52 weeks.
I see THIS is a good sign of things to come.
Go Biel
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