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1. Company Snapshot

1.a. Company Description

Chewy, Inc., together with its subsidiaries, engages in the pure play e-commerce business in the United States.The company provides pet food and treats, pet supplies and pet medications, and other pet-health products, as well as pet services for dogs, cats, fish, birds, small pets, horses, and reptiles through its www.chewy.com retail Website, as well as its mobile applications.It offers approximately 100,000 products from 3,000 partner brands.


The company was founded in 2010 and is headquartered in Dania Beach, Florida.

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1.b. Last Insights on CHWY

Chewy, Inc.'s recent performance was negatively impacted by concerns over its profitability, despite robust Q2 results and record Autoship growth. The company's decision to not provide a more upbeat outlook and a decrease in GAAP earnings triggered investor skepticism. Moreover, rising costs and competition in the pet food industry pose significant challenges. Nevertheless, Chewy's expanding Autoship program and efforts to diversify into new revenue streams, such as Chewy+ and pet health insurance, are positives. According to Arun Sundaram with CFRA, the selling action was due to "in line" profit.

1.c. Company Highlights

2. Chewy's Q2 2025 Earnings: Strong Growth and Expanding Margins

Chewy reported net sales of $3.1 billion for the second quarter of 2025, exceeding guidance and demonstrating 8.6% year-over-year growth. The company's gross margin expanded to 30.4%, driven by strong Autoship performance and the sponsored ads business. Adjusted EBITDA reached $183.3 million, representing a 5.9% margin, up 80 basis points year-over-year. The company also reported adjusted diluted EPS of $0.33, significantly beating estimates of $0.1427. The strong financial performance was accompanied by the repurchase of $125 million worth of stock.

Publication Date: Sep -11

📋 Highlights
  • Q2 Net Sales:: $3.1B (8.6% YoY growth), surpassing guidance.
  • Gross Margin Expansion:: 30.4% driven by Autoship (83% of sales) and sponsored ads.
  • Adjusted EBITDA:: $183.3M (5.9% margin), up 80 bps YoY with $125M stock repurchases.
  • Hard Goods Growth:: 15% YoY driven by 1,500+ new brands and in-stock improvements.
  • Chewy+ Momentum:: 3% sales penetration, with $800–$2,500 annual spend for members and 15% EBITDA flow-through target.

Growth Drivers

The key growth drivers for Chewy include its Autoship program, which represents 83% of sales and has reached a record high, exceeding overall sales growth. Hard Goods grew over 15% year-over-year, driven by structural volume growth. The Chewy+ membership program is also rapidly growing, with strong incrementality in spend, customer lifetime value, and positive contribution profit per customer.

Investment in Growth Initiatives

Chewy is investing in growth initiatives like Chewy+, targeting mid-single-digit percentage of sales by year-end, with positive gross profit expected. The company also launched "Get Real," a new private brand of fresh dog food, which exceeded expectations. The "Get Real" venture is expected to reach a market size of $8 billion to $12 billion in the coming years, with Chewy aiming for a meaningful market share.

Guidance and Outlook

For the third quarter of 2025, Chewy guided net sales of $3.07-$3.1 billion, representing 7%-8% year-over-year growth, and adjusted diluted EPS of $0.28-$0.33. For the full year 2025, the company guided net sales of $12.5-$12.6 billion, representing 7%-8% year-over-year growth, and adjusted EBITDA margin of 5.4%-5.7%. The company expects to achieve 60% of adjusted EBITDA margin expansion from gross margin improvements.

Valuation

With a P/E Ratio of 96.23, P/B Ratio of 37.3, and P/S Ratio of 1.18, Chewy's valuation multiples indicate a premium due to its strong growth prospects. The EV/EBITDA ratio of 54.29 also suggests that the market is pricing in significant future growth. The company's ROE of 48.34% and ROIC of 14.85% demonstrate its ability to generate strong returns on equity and invested capital.

3. NewsRoom

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Chewy (CHWY) Stock Declines While Market Improves: Some Information for Investors

Dec -02

Source:

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Is Chewy's Growing Vet Care Network Its Most Powerful Growth Lever?

Nov -28

Source: zacks.com

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Chewy (NYSE:CHWY) Receives Average Recommendation of “Moderate Buy” from Analysts

Nov -26

Source: defenseworld.net

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Chewy Customer Growth Picks Up: Higher NSPAC Signals Stronger Spend

Nov -24

Source: zacks.com

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Here's How Chewy's Autoship Is Powering a New Phase of Growth

Nov -20

Source: zacks.com

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Chewy Announces Fiscal Third Quarter 2025 Financial Results Conference Call

Nov -19

Source: businesswire.com

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5 Stocks For the 60% Surge in Pet Spending

Nov -12

Source: 247wallst.com

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Chewy (CHWY) Stock Dips While Market Gains: Key Facts

Nov -11

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.27%)

6. Segments

Consumables

Expected Growth: 8%

Chewy's consumables segment growth is driven by increasing pet humanization, rising e-commerce adoption, and expanding product offerings. Strong brand recognition, competitive pricing, and convenient auto-ship options also contribute to growth. Additionally, Chewy's strategic partnerships with pet food manufacturers and its private label brands further boost sales.

Other

Expected Growth: 5%

Chewy's 'Other' segment, with 5% growth, is driven by increasing pet owner adoption of pet health services, expansion of Chewy Health platform, and growth in sales of pet medications and supplies. Additionally, the rise of e-commerce and pet humanization trends contribute to the segment's growth.

Hardgoods

Expected Growth: 6%

Chewy's Hardgoods segment growth is driven by increasing pet humanization, rising e-commerce adoption, and expanding product offerings. Strong brand recognition, competitive pricing, and convenient shipping options also contribute to growth. Additionally, the company's strategic partnerships with pet food manufacturers and its Autoship feature, which encourages repeat purchases, further boost sales.

7. Detailed Products

Pet Food

Wide selection of high-quality pet food from popular brands, including Hill's Science Diet, Royal Canin, and Purina Pro Plan

Pet Supplies

Variety of pet supplies, including toys, treats, and grooming tools from brands like Kong, Pet Zone, and Oster

Pet Medication

Prescription and non-prescription medications for pets, including flea and tick prevention, heartworm prevention, and pain relief

Pet Grooming

Grooming tools and supplies, including shampoos, conditioners, and brushes from brands like Earthbath and Oster

Pet Health Supplements

Supplements and vitamins for pets, including joint support, digestive health, and skin and coat health

Pet Accessories

Pet accessories, including collars, leashes, and pet beds from brands like Yellow Dog Design and Pet Zone

8. Chewy, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Chewy's products are highly specialized and pet owners are loyal to specific brands, making substitutes less of a threat.

Bargaining Power Of Customers

While customers have some bargaining power due to the online nature of the business, Chewy's competitive pricing and loyalty programs help mitigate this threat.

Bargaining Power Of Suppliers

Chewy has a diverse supplier base and is not heavily reliant on any one supplier, reducing the bargaining power of suppliers.

Threat Of New Entrants

While there are some barriers to entry, the online pet supply market is relatively easy to enter, and new entrants could potentially disrupt the market.

Intensity Of Rivalry

The online pet supply market is highly competitive, with many established players competing for market share, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 52.18%
Debt Cost 3.95%
Equity Weight 47.82%
Equity Cost 8.48%
WACC 6.12%
Leverage 109.12%

11. Quality Control: Chewy, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Etsy

A-Score: 5.4/10

Value: 6.0

Growth: 7.8

Quality: 7.0

Yield: 0.0

Momentum: 8.5

Volatility: 3.3

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Advance Auto Parts

A-Score: 4.9/10

Value: 9.0

Growth: 1.6

Quality: 4.4

Yield: 4.0

Momentum: 9.0

Volatility: 1.3

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Chewy

A-Score: 4.7/10

Value: 1.7

Growth: 9.0

Quality: 5.3

Yield: 0.0

Momentum: 8.5

Volatility: 4.0

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Wayfair

A-Score: 4.0/10

Value: 5.7

Growth: 4.6

Quality: 4.0

Yield: 0.0

Momentum: 8.0

Volatility: 1.7

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GameStop

A-Score: 3.2/10

Value: 2.7

Growth: 4.2

Quality: 5.6

Yield: 0.0

Momentum: 4.5

Volatility: 2.0

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RH

A-Score: 2.9/10

Value: 6.9

Growth: 2.9

Quality: 4.4

Yield: 0.0

Momentum: 1.5

Volatility: 2.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

33.47$

Current Price

33.47$

Potential

-0.00%

Expected Cash-Flows