Chewy Continues to Outperform: Why Analysts Are Bullish on the Pet Supply Giant
The U.S. pet care industry is a massive and ever-expanding universe, projected to be valued at an impressive $157 billion in 2025, with forecasts suggesting it could balloon to $250 billion by 2030. Within this market, the love for a furry companion continues to drive steady, recession-resistant spending, and no company is capitalizing on the digital shift quite like Chewy Inc. (CHWY).
The online pet supply retailer recently released its third-quarter fiscal 2025 earnings, and the numbers offered a compelling story for investors. The company reported net sales of $3.12 billion, marking an 8.3% increase compared to the previous year and slightly exceeding analyst consensus. Even more impressive was the adjusted earnings per share (EPS), which came in at $0.32, handily beating the $0.13 forecast and underscoring a disciplined approach to profitability.
Chewy’s success isn’t just about shipping boxes of kibble; it’s rooted in a business model built on customer loyalty and predictable revenue. The company’s Autoship program, which ensures recurring deliveries of essential supplies, remains the bedrock of its financial stability. This segment experienced 8.7% growth, representing a record-breaking 80% of total net sales for the quarter. A high percentage of recurring revenue like this is a key differentiator in the competitive e-commerce landscape, which includes formidable rivals like Amazon, Walmart, and specialty retailers such as Petco.
Growth is also being powered by an expanding margin on products and services. Chewy has been strategically growing its higher-margin sponsored ads business, while its gross margin expanded to 29.8% for the quarter. Looking ahead, Chewy is not resting on its laurels. Management has raised its full-year fiscal 2025 sales guidance, and the company is actively expanding its footprint into new, sticky sectors, including the launch and expansion of its Chewy Vet Care clinics and the Chewy Plus membership program.
The positive results have translated into bullish sentiment on Wall Street. Following the strong earnings report, many analysts reiterated their positive ratings, with the consensus price target landing in the mid-$40 range, and some individual price targets set as high as $52. The overall sentiment is a “Moderate Buy,” reflecting confidence that Chewy can continue to take market share, especially as the broader e-commerce channel for pet products is projected to surge at a compound annual growth rate of 12.60% through 2030.
Ultimately, Chewy’s story is a classic case of digital disruption. By coupling a massive, diverse inventory with a customer-centric service model and a hyper-efficient subscription platform, the company is proving that in the battle for America’s pets, the online champion is still hungry for more. Its ability to grow both sales and profit faster than the broader pet category suggests its dominance is structural, not fleeting.
