U.S. Pet Spending Resilience in 2025 Highlights Shift in Consumer Behavior
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 25 2025
0mins
Should l Buy CHWY?
Source: Benzinga
- Resilience in Pet Spending: In 2025, U.S. pet spending demonstrated resilience despite ongoing cost-of-living pressures, with pet and pet product inflation easing to 0.3% in November, providing relief to consumers and highlighting the sector's defensive appeal.
- Shift in Consumer Behavior: A survey revealed that 97% of U.S. pet owners consider their pets family members, driving demand for pet technology and health-oriented products, which reflects younger pet owners' balancing act between wellness and affordability.
- Emergence of a Two-Speed Market: Industry experts noted a bifurcation in spending patterns, where affluent households continue to purchase premium products while approximately 75% of households shift towards value brands, benefiting private-label producers.
- Investor Focus: Despite a slowdown in overall deal activity, the pet care sector remains attractive to investors due to its stable demand and lower tariff exposure, with analysts predicting a significant increase in transaction activity in 2026 and 2027, particularly in premium and value segments.
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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: 23.670
Low
42.00
Averages
47.06
High
52.00
Current: 23.670
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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- Chewy's Sustained Growth: Despite Chewy's stock plummeting nearly 80% from its all-time high, its net sales reached $12.6 billion in fiscal 2025, a 6% year-over-year increase, with operating income surging 125%, indicating strong business performance in a competitive landscape.
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- Profitability Enhancement: Chewy is focusing on expanding its private-label products and health services to improve margins, having opened 18 veterinary clinics and planning to acquire Modern Animal, which will increase its clinic count to 47, thereby enhancing customer retention and repeat purchases.
- Autoship Program: By fiscal year 2025, 84% of Chewy's net sales will come from its autoship program, providing a stable revenue stream that offers a significant competitive advantage in the pet e-commerce sector, with sales and margins improving despite macroeconomic headwinds.
- Market Outlook: Despite facing economic challenges, Chewy's business remains resilient, and as it continues to grow its private label and healthcare services, the company is expected to gradually restore profitability, with the current stock price offering an attractive entry point for investors.
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- Financing Capability: GameStop has a $20 billion financing letter from TD Bank and $9.4 billion in cash, planning to fund the acquisition with a 50% cash and 50% stock split, although this may lead to share dilution risks.
- Cost Savings: The company anticipates achieving $2 billion in cost savings within the first year post-acquisition through reductions in sales and marketing, product development, and corporate overhead, aiming to enhance its competitive position.
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See More
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- Net Income Fluctuations: The net income of $223 million in fiscal 2025, down from $393 million the previous year, was influenced by a $241 million income tax benefit, highlighting the complexities in financial management and the need for careful analysis of earnings reports.
- Strengthened Competitive Advantage: Chewy has solidified its market position by offering low prices alongside superior customer service, and during the pandemic, it expanded into pharmaceuticals and telehealth services for pets, which could significantly enhance future sales.
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See More
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- Profitability Improvement: Although net income for fiscal 2025 was $223 million, down from $393 million the previous year, a $241 million income tax benefit contributed to a 125% spike in operating income, showcasing the company's potential for profitability.
- Cash Flow Enhancement: Chewy's free cash flow increased by 24% year-over-year to $562 million, indicating improved financial management and the ability to control its destiny, which supports future expansion plans.
- Competitive Advantage: By offering low prices and superior customer service, along with the introduction of pet pharmaceuticals and telehealth services during the pandemic, Chewy has solidified its market position, which is expected to drive sales growth in the future.
See More
