Chewy's Autoship Program Drives Record Growth and Customer Loyalty

Chewy Inc.’s CHWY Autoship subscription program remains a central driver of growth and customer loyalty. In the second quarter of fiscal 2025, Autoship customer sales reached $2.58 billion, rising nearly 14.9% year over year and significantly outpacing overall net sales growth of 8.6%. Autoship now represents 83% of total net sales, underscoring its pivotal role in the company’s sustained growth.

This remarkable performance is fueled by a combination of higher enrollment in Autoship and improved retention of existing subscribers. Chewy’s strategy of offering a wide product assortment, maintaining consistent in-stock availability and delivering a seamless digital shopping experience has made Autoship a preferred option for pet owners seeking convenience and value.

Customer metrics further highlight the program’s effectiveness. Chewy ended the fiscal second quarter with 20.9 million active customers, a 4.5% increase year over year, with many opting into Autoship shortly after joining. Net sales per active customer also grew 4.6% year over year, reflecting stronger engagement and higher average spend per client. 

Autoship’s share of net sales has steadily grown from earlier years, reflecting stronger conversion of new customers into recurring orders and deeper long-term engagement. Programs like Chewy+ further amplify the benefits, encouraging members to attach more products to each order and increasing overall customer lifetime value.

Looking ahead, Chewy projects full-year 2025 net sales of $12.5 billion to $12.6 billion, representing approximately 7% to 8% year-over-year growth. This outlook assumes continued strength in Autoship adoption and retention, highlighting the program’s role as a key engine for sustainable growth and long-term profitability in the competitive pet care market.

How Do CENT & WOOF Stack Up Against CHWY’s Sales Growth?

Chewy'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, mainly reflecting store closures and the strategic 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 & Estimates

Shares of Chewy have gained 12.2% year to date compared with the industry’s growth of 9.7%.

From a valuation standpoint, CHWY trades at a forward price-to-sales ratio of 1.18X, below the industry’s average of 2.23X. It has a Value Score of C.

The Zacks Consensus Estimate for CHWY’s fiscal 2025 and 2026 earnings implies year-over-year growth of 22.1% and 20.4%, respectively. Estimates for fiscal 2025 and 2026 have been revised upward by 3 cents and 11 cents, respectively, over the past 30 days.

CHWY currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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