Key Points
Chewy (NYSE: CHWY) is experiencing significant market challenges, with shares down over 40% year-to-date, trading below its 2019 IPO price. Despite this, the company reported continued growth in active customers and a shift to an integrated healthcare model through the recent acquisition of Modern Animal, which adds 29 locations to its veterinary services.
In fiscal 2025, Chewy’s Autoship program accounted for 83% of total revenue, up from 76% two years ago, with subscriber sales growing 12% compared to the company’s overall revenue growth of 6%. Adjusted EBITDA margins have improved from 3.3% in fiscal 2023 to 5.7% in 2025, with management targeting over 10% margin growth long-term, bolstered by AI-driven efficiencies.
Chewy holds approximately $880 million in net cash with no debt, allowing for further investment in growth initiatives like its vet clinics. However, increased competition and price sensitivity in the pet supply market pose ongoing risks to its profitability.
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