Chewy Inc

Chewy reported an 8% increase in sales for the quarter ended May 2026, while Petco Health and Wellness saw flat revenue in the same period. Chewy's quarterly revenue reached $3.3 billion, compared to Petco's $1.5 billion. Chewy trades at 0.7 times sales and 19 times EBITDA with a slight net cash balance, whereas Petco trades at 0.12 times sales and 10 times EBITDA but carries $2.3 billion in debt against a $750 million market cap. Chewy generates 84% of its sales from Autoship repurchases and is expanding into vet care, private label goods, and advertising to boost margins.

Bloomberg reports that a segment of Gen Z is accelerating savings and investments for retirement from a young age, sparking a movement dubbed Retirement-Maxxing. One example is Natalie Badour, age 26, who has amassed around 300,000 US dollars by saving more than half her income and holding shares in Chewy Inc. Data from Charles Schwab shows Gen Z begins saving on average at age 19, while Gen X started at 32 and Baby Boomers at 35. Vanguard Group reveals that one-third of Gen Z who opened an IRA last year chose to invest the full annual limit of 7,000 US dollars. A report by the Investment Company Institute and the University of Chicago found that older Gen Z members have nearly three times as much in retirement accounts as Gen X did at the same age, after adjusting for inflation. Analysts see this behavior rooted in economic uncertainty, such as high home prices, elevated interest rates, and risks to Social Security. Many savers also embrace the FIRE concept for financial independence and early retirement. However, experts at Vanguard caution that excessive saving may lead to neglecting credit card debt, resulting in high interest costs.

ClearBridge Investments stated in its second-quarter 2026 investor letter that concerns about Chewy being an AI loser are overstated, citing the online pet retailer's competitive positioning, customer purchasing dynamics, and margin expansion opportunities. The comments came as part of the firm's SMID Cap Growth Strategy commentary, which noted that Chewy shares were pressured by mixed end-market growth trends and AI-related fears despite solid company-specific execution. Chewy closed at $20.88 per share on July 10, 2026, with a market capitalization of $8.55 billion, and posted a one-month return of 7.96% while losing 44.78% over the past 52 weeks.

Kohl's posted its best comparable sales in over four years, Chewy's near-zero debt and record 8% EBITDA margin sparked acquisition talk on Reddit, and Wayfair surged 29% in a month toward analyst fair value above $93. Kohl's comparable sales fell 1.1% in the fiscal first quarter, revenue reached $3.17 billion, inventory dropped 8% year over year, and revolving credit borrowings fell to zero from $545 million. Chewy's first-quarter revenue rose 8% to $3.36 billion, with Autoship at 84% of net sales and 21.5 million active customers, while a $200 million buyback was completed in the quarter. Wayfair's 5.2% adjusted EBITDA margin was its strongest first quarter in five years, but a stockholders' deficit of $2.84 billion and $2.9 billion in long-term debt keep the risk profile elevated.

TD Cowen has named Chewy its top small and mid cap idea for 2026, citing business initiatives and market share potential. The call follows Chewy securing a new seven-year senior secured term loan credit facility and its addition to the Russell 2500 Index and Russell 2500 Growth Benchmark. Chewy's share price gained 9.63% over the past week but remains down 36.43% year to date, with a one-year total shareholder return decline of 48.10%. A Simply Wall St narrative model estimates a fair value of $31.05 per share versus a last close of $21.29, implying the stock is undervalued, though its current P/E of 34.2x is well above the US Specialty Retail industry average of 19.4x and the peer average of 14.8x.

Shares of LegalZoom, Angi, Instacart, and Chewy rose in afternoon trading after consumer confidence edged up to 91.2 in June. While the Present Situation Index contracted, the Expectations Index strengthened, signaling improved consumer outlook for income, business, and labor market conditions. LegalZoom gained 3.1%, Angi rose 3%, Instacart climbed 3.4%, and Chewy advanced 3.2%. The uptick in forward-looking optimism suggests consumers may increase spending on non-essential goods and services, benefiting consumer discretionary companies.

Chewy shares jumped 5.5% after the e-commerce pet retailer announced it is expanding its use of artificial intelligence and automation across customer service, pharmacy operations, fulfillment, and marketing to improve efficiency. The company built the required infrastructure in the first quarter of fiscal 2026 to deploy AI at a larger scale and expects these initiatives to generate efficiency benefits in the low tens of millions of dollars during fiscal 2026, with a more significant contribution anticipated in 2027 and beyond. Chewy's stock is down 37.9% year-to-date and trading at $20.79 per share, 50.9% below its 52-week high of $42.33 from September 2025.

Several major banks including Citi, Goldman Sachs, TD Cowen, RBC and UBS have reiterated positive views on Chewy following its latest quarterly results, pointing to improving profitability, efficiency gains and multiple growth initiatives across advertising, healthcare and subscriptions. Goldman Sachs highlighted stronger than expected first quarter 2026 EBITDA margins driven by advertising, product mix and AI powered efficiency, though cautious guidance and insider selling temper enthusiasm. Analysts see Chewy’s expansion into pet healthcare and enhanced advertising platform as key levers that could deepen customer relationships and support margins over time. The investment narrative projects $15.9 billion revenue and $622.1 million earnings by 2029, requiring 8.0% yearly revenue growth and an earnings increase of about $399 million from $222.8 million today, with a fair value estimate of $39.85 representing a 120% upside to the current price.

Shares of Chewy jumped 6.6% in afternoon trading after Adobe reported that Amazon Prime Day drove $8.3 billion in U.S. online sales, the biggest shopping day of the year so far. The 5.3% year-over-year increase surpassed Adobe's initial estimates and exceeded the previous year's Thanksgiving sales of $6.4 billion, signaling resilient consumer spending during promotional events. The broader consumer discretionary sector found support, with Amazon and Shopify also seeing positive momentum, while a drop in the 10-year yield below 4.5% provided valuation support. Chewy's stock remains down 43.2% year-to-date and is trading 56.2% below its 52-week high of $43.43 from June 2025.

Reddit users are showing bullish sentiment on Celsius Holdings, Chewy, and Estée Lauder, but Wall Street analysts agree with only two of the three. Celsius sentiment scores ranged from 86 to 90 in early June, driven by a post calling the stock criminally undervalued, yet shares are down 38% year to date and gross margins have compressed to 48% from 52%. Chewy sentiment rose from 78 to 88, supported by an acquisition thesis and a 52% jump in GAAP net income, with analysts setting a $31 target well above the $18 price. Estée Lauder sentiment swung from 35 to 72 after a viral thread about Michael Burry's position, but analysts remain cautious with a $95 target versus an $84 price, citing a $100 million tariff headwind and a 10,000-position restructuring.

Chewy is acquiring technology-enabled veterinary care provider Modern Animal, accelerating its push into the pet healthcare market. The combined businesses are expected to operate 60 clinics by the end of fiscal 2026, with embedded revenue contribution approaching $290 million at steady state. Chewy's fiscal 2026 outlook includes an estimated $70 million revenue contribution from Modern Animal, with total net sales guidance of $13.40 billion to $13.55 billion, representing year-over-year growth of 6.3% to 7.5%. Management expects the acquisition to create a modest margin-rate drag during 2026 as integration progresses, while the company plans to open 10 to 12 Chewy Vet Care locations this year. Chewy shares have fallen 22.8% in the past three months, and the stock currently carries a Zacks Rank #4 (Sell).

Chewy has launched Rare Breed, a new premium dog treat line focused on simple, high-quality ingredients and tied to animal welfare initiatives. The product expands Chewy's presence in premium pet products and adds a mission-driven angle to its pet care offering. The launch comes as Chewy's stock trades at $18.21, with multi-year returns declining as much as 77.3% over five years. The company aims to deepen its role in everyday pet care and attract higher-spending pet owners through welfare partnerships and quality ingredients.

The Motley Fool highlights Chewy, DraftKings, and Rocket Lab as three growth stocks worth buying now for long-term holds. Chewy shares have slumped despite a 7.7% revenue increase and expanding autoship sales, with analysts maintaining a strong buy consensus and a $30.82 price target that implies over 60% upside. DraftKings has rebounded more than 30% from its March low as fears over new rivals Polymarket and Kalshi ease, with last quarter's revenue up 17% to $1.65 billion and the company launching its own prediction market app. Rocket Lab is down nearly 30% from its recent peak, but the SpaceX IPO has spotlighted the $370 billion space industry, where Rocket Lab's small and medium-lift rockets and satellite technology business position it for growth in a market where medium-lift launches are expected to dominate.

A head-to-head analysis of American Eagle Outfitters and Chewy concludes that Chewy is the more resilient consumer stock for 2026. American Eagle Outfitters reported fiscal 2025 revenue of nearly $5.5 billion and net income of $192.0 million, while Chewy posted revenue of nearly $12.6 billion and net income of approximately $222.8 million. Chewy's Autoship program and expansion into veterinary clinics through the acquisition of Modern Animal are cited as key strengths, whereas American Eagle Outfitters faces headwinds from a new 10% global tariff and discretionary spending pressure. American Eagle Outfitters trades at a forward P/E of 10.3x and a P/S ratio of 0.6x, compared to Chewy's forward P/E of 23.0x and identical P/S ratio of 0.6x. The analysis favors Chewy for its predictable, recurring revenue model and diversified growth into pet health services.

Chewy's Autoship program generated customer sales of approximately $2.83 billion in the first quarter of fiscal 2026, a more than 10% year-over-year increase that accounted for 84.4% of total net sales. Autoship growth outpaced overall company growth, reinforcing the durability and predictability of the recurring revenue model. Net sales per active customer rose 4.6% to $597, while management highlighted plans to enhance the Autoship platform and digital marketing to accelerate product line attachment rates and customer acquisition. Chewy continues to gain market share, with Autoship adoption and resilient customer spending positioning the program as a key long-term growth driver.

Chewy is leveraging artificial intelligence and its expanding pet healthcare platform to improve margins in fiscal 2026. The company expects AI-driven efficiencies to deliver a low tens of millions of dollars benefit this year, with a larger ramp in 2027 and beyond, while healthcare assets like SmartPak and Modern Animal are projected to contribute $80 million and $70 million to net sales, respectively. Gross margin rose 50 basis points to 30.1% in the first quarter, and adjusted EBITDA margin expanded 130 basis points to 7.5%, supported by sponsored ads, supply-chain efficiencies, and marketing productivity. However, Chewy lowered its full-year net sales outlook to $13.40-$13.55 billion from $13.6-$13.75 billion, citing cautious consumer spending and pressure on premiumization. The company maintained its adjusted EBITDA margin guidance of 6.6-6.8%.