Chewy, Inc. CHWY and Central Garden & Pet Company CENT are two prominent players in the pet care industry, each leveraging distinct strategies to capture growth in a maturing market.
Chewy, with a market capitalization of nearly $11 billion, has evolved into a leading digital-first pet care platform, driven by its Autoship subscription model, robust e-commerce infrastructure and expanding ecosystem across pharmacy, veterinary services and private-label offerings. The company serves more than 21 million active customers, supported by a nationwide fulfillment network that enables high recurring revenues and strong customer engagement.
In contrast, Central Garden & Pet, with a market capitalization of approximately $3 billion, operates a diversified portfolio across pet and garden segments, offering a wide range of branded and private-label products spanning consumables, supplies and outdoor categories. Its business is supported by strong retail partnerships, a broad distribution network and ongoing efforts to optimize its portfolio and improve operational efficiency.
Both companies are navigating a pet care landscape, characterized by moderating industry growth, cautious consumer spending and persistent cost pressures. As each balances profitability with strategic investments in growth, the key question for investors is: which stock currently offers the more compelling upside opportunity?
The Case for CHWY
Chewy is entering fiscal 2026 with improving business momentum, supported by steady market share gains, rising customer engagement and a resilient revenue model. The company continues to benefit from stable demand dynamics within the pet care industry, driven by recurring purchase behavior and strong emotional attachment between consumers and their pets. This backdrop, combined with ongoing premiumization trends, is strengthening Chewy’s position within the expanding digital pet ecosystem.
A key pillar of Chewy’s growth is its Autoship program, which accounts for 83.3% of the total net sales in fiscal 2025 and continues to outpace overall company growth. This subscription-based model enhances revenue visibility, improves retention and supports higher customer lifetime value. At the same time, increasing traction in higher-value categories, such as health, wellness and veterinary services, is driving improved spending per customer, reinforcing long-term growth in net sales per active customer.
Chewy is also leveraging technology as a core differentiator. The company has built an integrated data platform and is embedding AI across customer service, fulfillment, pharmacy and marketing operations to enhance personalization and operational efficiency. These initiatives are expected to deliver low tens of millions of dollars in savings in fiscal 2026, with a path to more than $50 million in annualized benefits by fiscal 2027, highlighting a clear opportunity for scalable efficiency gains.
Strategic expansion initiatives are further strengthening Chewy’s ecosystem. The company is scaling its Chewy Vet Care network, which now includes 18 locations, serving as both a customer acquisition engine and a driver of deeper engagement. In parallel, the rollout of Chewy Made and broader private-label expansion is enhancing its presence in consumables, a large and underpenetrated category, while supporting long-term margin and mix improvement.
Looking ahead, Chewy expects fiscal 2026 net sales of $13.6-$13.75 billion, implying 8-9% growth, supported by continued share gains and balanced contributions from customer growth and higher spending per user. With no reliance on pricing inflation and multiple structural drivers in place, the company appears well-positioned to sustain consistent growth while improving operational efficiency over time.
The Case for CENT
Central Garden & Pet is benefiting from a stronger operational foundation following the completion of its multi-year cost and simplicity program. The initiative has streamlined the company’s supply chain, optimized its distribution network and embedded efficiency across the organization. As a result, the company operates with improved service levels and a more agile structure, positioning it to better align with customer demand while supporting long-term scalability.
The company’s diversified portfolio across pet and garden segments continues to provide stability and broad market exposure. Within the pet segment, Central Garden & Pet has maintained its overall market share while recording gains in categories, such as Dog Treats, Flea & Tick, Pet Bird and Animal Health. This consistent performance across essential product categories highlights the resilience of demand and the company’s ability to execute effectively in its core markets.
At the same time, Central Garden & Pet is actively improving the quality of its revenues through portfolio optimization initiatives. By exiting lower-margin categories, including pet durables and select live plants, and restructuring certain international operations, the company is shifting its focus toward higher-return segments. While these actions have weighed on near-term sales, they are enhancing overall profitability and creating a more sustainable earnings profile over time.
Growth is also being supported by a combination of innovation, strategic partnerships and targeted acquisitions. The company’s recent partnership with Phillips Pet Food & Supplies to establish a pet distribution joint venture is expected to strengthen its nationwide distribution capabilities, creating a more agile and scalable network across the United States. This effort complements ongoing product innovation across brands such as Nylabone and Kaytee, as well as acquisitions like Champion USA, which expand its presence in higher-value categories and reinforce its long-term growth strategy.
Central Garden & Pet’s financial position supports its strategic priorities. The company ended the first quarter fiscal 2026 with approximately $721 million in cash and investments, alongside total debt of $1.2 billion, resulting in net leverage of 1.2X. This balance sheet strength provides flexibility to invest in growth initiatives, pursue acquisitions and return capital to shareholders. Combined with ongoing productivity improvements and disciplined capital allocation, Central Garden & Pet appears well-positioned to drive long-term value creation.
How Does the Zacks Consensus Estimate Compare for CHWY & CENT?
The Zacks Consensus Estimate for Chewy’s current fiscal-year sales and EPS implies growth of 8.6% and 28.4%, respectively, from the year-ago period’s actuals. For the next fiscal year, the consensus estimate indicates an 8.2% rise in sales and 22.2% growth in earnings. The consensus estimate for EPS for the current fiscal year has increased 2 cents to $1.63 over the past 30 days, while for the next fiscal year, it has improved by 1 cent to $1.99.
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The Zacks Consensus Estimate for Central Garden & Pet’s current fiscal-year sales and EPS implies a decline of 0.6% and growth of 3.7%, respectively, from the year-ago period’s actuals. For the next fiscal year, the consensus estimate indicates a 1.5% rise in sales and 3.9% growth in earnings. The consensus estimate for EPS for the current and next fiscal year has increased 1 cent each to $2.83 and $2.94, respectively, over the past 30 days.
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Assessing Recent Stock Performances of CHWY & CENT
Chewy’s shares have lost 12.1% over the past three months. Meanwhile, Central Garden & Pet’s stock has gained 11.5%.
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Dive Into Stock Valuations of CHWY & CENT
Chewy is trading at a forward price-to-sales (P/S) multiple of 0.76, down from its median of 1.00 in the last three years. Central Garden & Pet’s forward 12-month P/S multiple sits at 0.75, above its median of 0.73 in the last three years.
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CHWY or CENT: Which Offers Greater Potential?
Chewy emerges as the stronger investment candidate, supported by its digital-first platform, subscription-driven Autoship model and expanding ecosystem across healthcare, private-label offerings and technology-led capabilities. Its ability to drive consistent customer engagement, increase spending per user and leverage AI for efficiency and personalization positions the company to deliver sustained long-term growth.
In contrast, Central Garden & Pet is making progress through operational improvements, portfolio optimization and strategic initiatives, but its growth trajectory remains more gradual, making it relatively less compelling for investors seeking stronger upside potential.
Both CHWY and CENT currently carry 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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This article originally published on Zacks Investment Research (zacks.com).