Chewy (CHWY) Stock Forecast & Price Target

Chewy, the largest e-commerce retailer in the U.S. petcare sector, reported a remarkable achievement with $11.9 billion in sales for fiscal 2024, fueled by a diverse range of products including pet food, treats, and hard goods. The company's active customer base increased to 20.9 million, surpassing growth expectations, and demonstrating improved customer acquisition and retention, as evidenced by a 5% year-over-year rise in net sales per active customer. Management has positively adjusted the full-year revenue outlook to a range of $12.50 billion to $12.60 billion, reflecting confidence in sustained demand and strategic investments in areas like vet clinics to enhance customer engagement.

Chewy's stock outlook is negatively impacted by anticipated slowdowns in eCommerce penetration in the pet category, leading to concerns about industry growth and increased competition. Key risks include the firm's inability to effectively acquire and retain customers, forecast consumer trends, and navigate operational challenges, all of which could hinder its relative premium positioning in a competitive landscape. Management's projection of modest industry growth alongside muted household formation and limited pricing contribution indicates that normalization of market conditions may be further delayed, adding to the uncertainty surrounding Chewy's financial performance.