Chewy, Inc. (NYSE:CHWY) is a leading online retailer specializing in pet products, offering a wide range of items including food, toys, and healthcare products for pets. The company has carved out a niche in the pet industry with its subscription-based services, such as Chewy+, which provide convenience and cost savings for pet owners. Chewy competes with other online and brick-and-mortar pet retailers, striving to maintain its market position through innovation and customer engagement.
On December 11, 2025, Goldman Sachs set a price target of $52 for Chewy, suggesting a potential price increase of approximately 46.77% from its current price of $35.43. This optimistic outlook aligns with Chewy's strong fiscal third-quarter performance, where sales exceeded expectations. The resilience of the Chewy+ subscription program played a significant role in this success, as more customers than anticipated continued their subscriptions despite price increases.
Chewy's third-quarter earnings report revealed a robust performance, with earnings of 32 cents per share, surpassing the anticipated 30 cents. The company achieved an 8.3% year-over-year revenue increase, reaching $3.12 billion. This growth was driven by an increase in unit volume rather than price hikes, indicating strong demand for Chewy's products. The number of active customers rose to 21.2 million, marking a nearly 5% increase year-over-year, thanks to improved marketing efficiency and higher conversion rates.
Despite initial market volatility due to Chewy's fourth-quarter adjusted earnings guidance of 24 to 27 cents per share, which fell short of the consensus expectation of 29 cents, the stock stabilized after management clarified the inclusion of $10 million in SmartPak integration costs. Analysts noted a positive shift in customer momentum, with net customer additions improving to 250,000 from 150,000 in the previous quarter, while gross margins remained steady.
Chewy's Autoship sales, a key component for predictability and cost efficiency, grew by 13.6% year-over-year to $2.61 billion, outpacing the overall company growth. The mobile app also performed well, with a 15% increase in both app customers and orders, supported by enhanced app functionality and increased direct traffic. Additionally, Chewy Vet Care exceeded expectations, further enhancing customer engagement and satisfaction. Overall, Chewy continues to demonstrate resilience and growth despite challenging macroeconomic conditions.
