Chewy (CHWY) Stock Forecast & Price Target

Chewy has demonstrated a robust performance with active customers increasing to 20.9 million, growing by approximately 150,000 quarter-over-quarter, which is significantly ahead of consensus expectations. The company's net sales per active customer reached $591 in the second quarter, marking a 5% year-over-year increase, while auto-ship sales grew by 15% year-over-year, reflecting strong ongoing engagement and customer loyalty. Additionally, management has raised the revenue outlook for the fiscal year to between $12.50 billion and $12.60 billion, indicating confidence in continued growth driven by investments in customer retention and category share expansion.

Chewy's stock outlook is negatively impacted by potential slowing of e-commerce penetration within the pet category and increased competition, resulting in a challenging growth environment. The company faces risks, including the inability to effectively acquire and retain customers, forecast consumer trends, and manage supplier relationships, which could further threaten its market position. Management's forecast for low single-digit industry growth coupled with muted household formation and limited pricing power raises concerns about Chewy's ability to sustain its premium positioning in the marketplace.