Chewy says pet ownership to keep increasing despite worries about rising costs

By Bill Peters

The online pet-supplies retailer's stock is having its best day in two years as it's selling more pet-care items and provided an upbeat sales outlook

Chewy said pet-ownership trends appeared "stable" with no signs of deterioration.

Shares of Chewy were headed toward their biggest gain in nearly two years on Wednesday after the online pet-supplies retailer provided an upbeat sales forecast for this year, with the pet industry expected to keep growing despite concerns about surging gas prices and cracks in the economy.

CEO Sumit Singh said he expects 2026 to largely mirror 2025, as the pet industry remains resilient to macroeconomic and geopolitical uncertainties.

"Pet-household formation appears stable, with no evidence of deterioration," Singh said.

Chewy's stock (CHWY) soared 14.4% in recent afternoon trading. That put the stock on track for its biggest one-day gain since a record 27.1% rally on May 29, 2024.

Singh's comments dispelled fears that the Iran war's affect on gas prices might curtail pet ownership. Prior to Wednesday's surge, Chewy's stock had dropped 14.5% since the war started in late February.

Singh said he expected the industry's growth to come mainly from selling more items, rather than higher prices for products. And he said more pet-related spending was likely to take place online, as shoppers gravitate toward automatic purchases to restock their supplies. Those trends, he said, would help Chewy pick up a bigger share of the pet market.

Chewy said it expects sales of $13.6 billion to $13.75 billion this year, or a roughly 8% to 9% gain. That forecast was above the average analyst revenue estimate compiled by FactSet of $13.59 billion.

Management said its sales forecast assumed no higher prices for the year and slightly more active customers. It added that the adoption of artificial intelligence, as well as a new automated fulfillment center in Houston, would help pad profit margins.

Chewy's upbeat outlook comes as Wall Street tries to gauge the Iran war's impact on consumer spending, as the conflict in the Middle East drives oil (CL00) and gas prices higher. Some retailers have downplayed the threat. However, home builder KB Home (KBH) said late Tuesday that the war had already brought more anxiety to the home-buying market.

Meanwhile, the costs of pet care itself have risen in tandem with other costs of living, as equipment, labor and medicine get more expensive. Private equity has taken over a bigger slice of the market; last year, BofA analysts, citing data from KMPG, said some 30% of the U.S.'s vet clinics were owned by private-equity firms, with 20% owned by corporations.

Some analysts expect demand for pet care to increase, as pets adopted during the pandemic get older. This month, pet-supplies retailer Petco Health & Wellness (WOOF) said products like fresh food, services like dog grooming and its own store brands had helped sales.

During Chewy's earnings call on Wednesday, Singh said the company had opened 10 new Chewy Vet Care practices last year, bringing the total to 18 locations in five states. He also said the company would expand its own private-label offerings.

For the fourth quarter, Chewy reported $3.265 billion in sales, up 0.5% from a year ago and in line with the FactSet consensus. Earnings per share rose to 9 cents, from 5 cents a year earlier, to match Wall Street's forecasts.

-Bill Peters

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03-25-26 1409ET