Can Chewy Continue to Build Momentum in Active Customer Expansion?

Chewy, Inc. CHWY sustained strong momentum in active customer expansion in the second quarter of fiscal 2025, underscoring the strength of its engagement and retention strategies. The company closed the quarter with 20.9 million active customers, a 4.5% year-over-year increase, signaling effective customer acquisition and rising loyalty among existing users.

Growth was led by the continued success of the Autoship subscription model. Autoship customer sales reached $2.58 billion, representing 83% of the total second-quarter net sales and increasing nearly 15% year over year. Autoship customers remain Chewy’s most valuable segment, driving higher reorder rates and deeper engagement across product categories. Net Sales Per Active Customer rose 4.6% year over year to $591, reflecting stronger customer spending patterns and share-of-wallet gains.

Chewy’s paid membership program, Chewy+, also outperformed expectations. Approximately 3% of monthly sales now stem from Chewy+ members, who exhibit higher purchase frequency, average order value, and loyalty compared to non-members. Management anticipates the program to contribute revenues in the mid-single-digit range by the year-end, adding to overall sales momentum and profitability.

The launch of “Get Real,” Chewy’s exclusive fresh dog food brand, expanded the company’s private-label portfolio and capitalized on the growing demand for premium and fresh pet nutrition. Early feedback has been positive, reinforcing Chewy’s strategy of offering differentiated, high-margin products.

Looking ahead, management remains confident in sustaining active customer growth through investments in Autoship, Chewy+ and private brands. With the full-year revenue guidance raised to $12.5-$12.6 billion, or 7-8% growth excluding last year’s 53rd week, Chewy appears well-positioned for robust expansion in the pet care industry.

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, reflecting the impacts of store closures and the 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 4.8% year to date compared with the industry’s growth of 9.7%.

From a valuation standpoint, CHWY trades at a trailing price-to-sales ratio of 1.22X, below the industry’s average of 2.69X. It has a Value Score of C.

The Zacks Consensus Estimate for CHWY’s fiscal 2025 earnings implies year-over-year growth of 22.1%, whereas the same for fiscal 2026 indicates an uptick of 20.8%. Estimates for fiscal 2025 and 2026 have been unchanged and revised upward by one cent, respectively, in the past seven 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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