Inflation Concerns Weigh on Consumer Spending, Affecting CHWY, HD, and NCLH Stocks
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 20 2026
0mins
Source: stocktwits
- CHWY Stock Decline: Chewy Inc.'s shares fell to $19.46, marking a new 52-week low, as inflation concerns have led to reduced consumer spending on discretionary items, with CEO noting that American customers feel 'stretched' financially, posing risks to future performance.
- HD Earnings Beat: Home Depot's shares dipped to a 52-week low of $289.10 but closed up 0.88% after reporting Q1 revenue of $41.77 billion and adjusted EPS of $3.43, both exceeding market expectations, indicating improved sales activity despite rising borrowing costs.
- NCLH Faces Macro Challenges: Norwegian Cruise Line's stock fell for the fourth consecutive day to a new 52-week low of $14.53, as rising fuel costs and high debt levels weigh heavily on the company, compounded by a lowered 2026 guidance reflecting weak bookings amid geopolitical tensions.
- Cautious Market Sentiment: Despite significant declines in CHWY and NCLH stocks, down over 41% and 35% respectively, Wall Street remains optimistic about their long-term prospects, with analysts projecting a potential 108% return for CHWY over the next 12 months, while retail sentiment on HD remains 'extremely bullish'.
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Analyst Views on CHWY
Wall Street analysts forecast CHWY stock price to rise
20 Analyst Rating
17 Buy
3 Hold
0 Sell
Strong Buy
Current: 21.380
Low
42.00
Averages
47.06
High
52.00
Current: 21.380
Low
42.00
Averages
47.06
High
52.00
About CHWY
Chewy, Inc. is an e-commerce business geared toward pet products and services. The Company’s products consist of pet food and treats, pet supplies and pet medications, other pet-health products, and pet services. It serves its customers through its retail websites, and its mobile applications and focuses on delivering customer service, competitive prices, convenience, including Chewy’s Autoship subscription program, and a range of pet food, treats and supplies, and pet healthcare products and services. It partners with approximately 3,200 of the brands in the pet industry, and it creates and offers its own private brands. It owns a number of trademark registrations and applications in the United States and in foreign jurisdictions. These trademarks include American Journey, Blue Box Event, Careplus, Chewy, Chewy.com, Chewy Vet Care, Dr. Lyon’s, Frisco, Goody Box, Onguard, PetMD, PracticeHub, Tiny Tiger, True Acre Farms, Tylee’s, Vibeful, and The Zoo.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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See More
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- Intensified Market Competition: As competition in the retail sector intensifies, Walmart's omnichannel upgrades enable it to more effectively respond to challenges from other major retailers, enhancing its market share.
- Shifting Consumer Behavior: With evolving consumer demands for price and convenience, Walmart's omnichannel strategy aims to address these needs, thereby increasing customer loyalty and purchase frequency.
See More
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- Omnichannel Capability Reshaping: Walmart's omnichannel capabilities are reshaping how consumers shop, particularly among major retailers, as shoppers increasingly prioritize convenience and delivery options, which could impact Target's market share.
- Investor Attention: Although Target did not make it onto The Motley Fool's list of top stocks, Walmart's ongoing innovation and market adaptability may draw more investor interest in its stock performance.
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See More
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- Subscription Service Growth: Chewy's Autoship subscription service accounted for 83% of total revenue in fiscal 2025, up from 76% two years prior, indicating strong demand for pet food and medications despite overall revenue growth of only 6%.
- Profitability Improvement: The adjusted EBITDA margin increased from 3.3% in fiscal 2023 to 5.7% in 2025, with management guiding for another 100 basis points of margin expansion this year and a long-term target of at least 10%, reflecting the company's efforts to enhance operational efficiency and profitability.
- Market Competition Pressure: While Chewy continues to see growth in active customers and free cash flow, it faces pricing pressures from competitors like Amazon and Walmart, which could further squeeze margins in a price-sensitive consumer market.
- Financial Flexibility: Chewy has approximately $880 million in net cash and no debt, providing financial support for investments in growth areas like vet clinics, with free cash flow increasing by 24% to $562 million last year, demonstrating strong cash generation capabilities.
See More
Chewy Faces Market Pressure Amid Growth Opportunities
- Stable Customer Growth: Despite Chewy's stock price plummeting over 40% year-to-date, the company continues to see growth in active customers and spending per customer, with Autoship sales accounting for 83% of total revenue in fiscal 2025, highlighting the stability and core importance of its subscription model.
- Improving Profitability: Chewy's adjusted EBITDA margin has increased from 3.3% in fiscal 2023 to 5.7% in 2025, with management guiding for an additional 100 basis points of margin expansion this year, indicating a strong focus on enhancing profitability.
- Intensifying Market Competition: Chewy faces significant price pressure from competitors like Amazon and Walmart, and a potential price war could further squeeze its margins, presenting a risk that investors need to monitor closely.
- Strong Financial Flexibility: With approximately $880 million in net cash and no debt, Chewy is well-positioned to invest in growth initiatives such as expanding its vet clinics, and its free cash flow grew by 24% to $562 million last year, reflecting a solid financial foundation.
See More
