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Dive Brief:

Dive Insight:

The pet market is not what it was during the pandemic , though Chewy CEO Sumit Singh called the situation “nuanced,” with adoptions from shelters and rescue groups still up (and cat adoptions outpacing dog adoptions).

“As of right now, I think it's a bit of a wait-and-watch approach,” he told analysts Wednesday . “But regardless of how the market performs, we expect to continue to take share in '25.”

Chewy does look to be grabbing market share, Singh said, citing Nielsen and other research. The pet e-retailer is likely “taking share from competitors such as food, drug and specialty retailers,” though larger retailers like Amazon and Walmart remain formidable competitors, UBS analysts led by Michael Lasser said in a Wednesday research note.

The company’s subscriptions are driving most sales, with its Chewy+ and Autoship options “acting as flywheels into each other,” said Singh. Chewy+, which costs $49 per year and provides free shipping and other perks, is growing. Autoship subscribers don’t pay for membership but receive discounts. Installations of the company’s app grew 20% year over year in the fourth quarter, with the number of customers making their first app purchase up 34%, he said.

“So these are customers that are not the typical leaned-in e-com customer, right, but [are] gravitating towards us due to the fact that we're kind of the brand that is expanding in multiple options,” he said. “Chewy+ is expanding, Autoship provides the value that they're looking for.”

Inflation plus the addition of so many new customers probably dampened net sales per active customer somewhat, according to UBS. Net sales per active customer grew over 4% to $578, Chewy said.

“This is because customers new to [Chewy] are likely spending well below existing customers who have been interacting with [its] ecosystem for some time,” Lasser said. “So, these new customers are being added to the base while only contributing a small amount to sales initially. This means that as customers ramp up the maturity curve, their wallet share ... should increase. We think this will likely happen, as the company noted the customer cohorts it is capturing are showing strong trends similar to pre-pandemic periods.”

Chewy is also less vulnerable to today’s consumer climate because it’s less dependent on sales of discretionary goods, analysts said. U.S. consumers continue to register major concerns about the economy, with sentiment deteriorating for months .