Chewy, Inc.’s CHWY Autoship program continues to anchor its business model, driving strong recurring revenue visibility and customer retention. The company highlighted that Autoship accounted for 83.3% of fiscal 2025 net sales, reflecting the growing preference for automated replenishment in essential pet care categories. This high penetration reinforces the predictability and stability of CHWY’s revenue base.
A key strength of CHWY’s Autoship ecosystem lies in its ability to embed convenience into customer behavior. By enabling seamless, scheduled deliveries of frequently purchased items, the company reduces friction in the buying process and strengthens long-term engagement. This model is particularly effective in the pet category, wherein demand is recurring and largely non-discretionary.
Autoship growth continues to outpace overall sales, increasing approximately 14% year over year in fiscal 2025. This trend indicates deeper customer adoption and higher spending levels among existing users. As customers increasingly rely on Autoship, CHWY benefits from improved retention rates and rising net sales per active customer, reinforcing its recurring revenue flywheel.
The program is further supported by CHWY’s expanding customer base, which reached 21.3 million active users, alongside steady growth in net spend per active customer (NSPAC), which rose to $591 in the fourth quarter fiscal 2025. These metrics highlight the company’s success in both acquiring customers and deepening relationships with existing ones through its subscription-driven model.
Management expects continued strength in Autoship as part of its broader growth framework, supported by stable customer additions, consistent spending expansion and ongoing share gains. With Autoship already contributing the majority of revenues, its sustained growth is expected to remain a key driver of predictable sales and margin expansion in 2026 and beyond.
CHWY’s Price Performance, Valuation & Estimates
Chewy, which competes with BARK, Inc. BARK and Petco Health and Wellness Company, Inc. WOOF, has seen its shares jump 16.7% in the past month compared with the industry’s growth of 17.3%. Meanwhile, BARK shares have declined 19.3% and Petco has gained 4.9%.
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From a valuation standpoint, CHWY trades at a trailing price-to-sales ratio of 0.82X, below the industry’s average of 2.04X. It has a Value Score of A. CHWY is trading at a premium to BARK (with a forward 12-month P/S ratio of 0.19) and Petco (0.16).
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The Zacks Consensus Estimate for CHWY’s fiscal 2026 earnings implies year-over-year growth of 28.4%, whereas the same for fiscal 2027 indicates an uptick of 22.2%. Estimates for fiscal 2026 and 2027 have been revised upward by 7 cents and 8 cents, respectively, in the past 30 days.
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CHWY currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Petco Health and Wellness Company, Inc. (WOOF): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).