Chewy, Inc.
Consumer Discretionary · Internet & Direct Marketing Retail
Structural: $150B+ US pet category, non-discretionary consumables base. ~80% of net sales now flow through Autoship - locked-in recurring revenue with 12-18mo customer LTV runway. Pet humanization tailwind extends category growth above GDP; healthcare/Rx/insurance + Chewy Vet Care clinics layer higher-margin services on top of food/supplies.
- Autoship attach >80% of sales - closest thing in retail to subscription economics
- Pharmacy + healthcare mix shift lifts gross margin every quarter (29%+ and trending up)
- Vet Care clinic rollout (15+ open, 8-10/yr cadence) opens services TAM at higher unit economics
- Net sales per active customer climbing as cohort matures even as customer count plateaus
- Free cash flow + share buybacks now structural; balance sheet net cash
- Active customer count stuck near 20M for 2+ years - TAM penetration concern
- $AMZN + $WMT + Costco compete on price in core food/supplies
- Vet Care capex drags near-term margin while clinic count is sub-scale
- Ryan Cohen meme legacy + BC Partners overhang create episodic flow risk
- Post-COVID pet adoption normalization - household pet formation flat-to-down 2024-25
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