Chewy, Inc. (CHWY) Stock Analysis

Chewy’s primary competitive advantage is its customer-centric business model, which underpins high retention and recurring revenue. Over 80% of sales are generated by Autoship subscription customers, providing predictable demand and reducing churn. Chewy’s Net Promoter Score and customer satisfaction consistently outpace traditional retailers, reflecting its reputation for responsive service and convenience.

The company’s product breadth—offering approximately 130,000 SKUs from 3,200 brands—rivals Amazon and Walmart, but Chewy differentiates with pet-specific expertise, curated content, and personalized engagement. Its logistics network enables overnight or two-day delivery to nearly all U.S. households, matching Amazon’s speed in the pet category.

Chewy’s scale in nondiscretionary categories (food, health, pharmacy) is a structural advantage: 85% of revenue comes from these resilient segments, insulating results from economic cycles. The company is the #1 U.S. pet pharmacy and has expanded into high-margin verticals such as insurance, telehealth, and veterinary clinics, deepening customer relationships and wallet share.

Compared to Amazon and Walmart, Chewy’s focus yields higher share of wallet among pet owners, but it lacks their cross-category traffic and pricing power. Private label penetration and technology investments (automation, AI-driven recommendations) support margin expansion, but reliance on third-party logistics and supplier concentration remain risks. Overall, Chewy’s brand, service, and subscription model create a defensible niche, though scale and cost advantages of larger rivals are persistent threats.