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Chewy’s Autoship program, which allows users to schedule recurring deliveries of pet supplies, has supported sales growth in the past few quarters. Last year, the company also launched pet clinics.
Retail interest in Chewy, Inc (CHWY) climbed higher on Wednesday after the pet products retailer reported better-than-expected quarterly results and forecasted a strong year.
The e-commerce firm projected full-year net sales in the range of $12.3 billion to $12.45 billion, up 6% to 7% year over year. That is broadly in line with a FactSet estimate of $12.38 billion and compares to a 6.4% growth in the prior year.
In Q4, net sales rose 15% to $3.25 billion, topping the consensus estimate of $3.2 billion. Adjusted earnings per share rose to $0.28 from $0.18 a year earlier and also beat the target of $0.21.
"Our performance was underpinned by strong active customer growth, and compelling Autoship customer loyalty," CEO Sumit Singh said.
On the analyst call, Singh said that Chewy sees "minimal price inflation," signaling that the business might be more insulated from macro factors than other retailers.
Chewy has been navigating a competitive pet e-commerce market, benefiting from strong customer loyalty and subscription-based offerings.
Its Autoship program, which allows users to schedule recurring deliveries of pet supplies, has supported sales growth in the past few quarters.
Last year, the company also ventured into veterinary practice with the launch of pet clinics.
CHWY shares ended 1.1% lower at $33.25 on Wednesday amid a selloff in the broader market.
Barclays raised its price target on the company's shares to $44 from $40, reiterating its 'overweight' rating. Mizuho raised its PT by $1 to $43 and maintained its 'outperform' rating.
Both investment advisors noted that Chewy's outlook, which likely includes some conservatism from macro headwinds and tariffs, is attractive.
Barclays said the company is one of the top names to watch in the e-commerce sector.
On Stocktwits, retail sentiment for CHWY climbed higher in the 'extremely bullish' category, while message volume remained 'extremely high.'
A user reiterated the business's resilience: "Most folks will feed their pet before they feed themselves."
Another user noted that watchers for the stock grew by a couple of hundreds.
CHWY shares are down 0.7% year to date.
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