{"id":2273,"date":"2024-07-17T21:04:13","date_gmt":"2024-07-17T21:04:13","guid":{"rendered":"https:\/\/blog.mukundmohan.online\/?p=2273"},"modified":"2024-07-17T21:04:13","modified_gmt":"2024-07-17T21:04:13","slug":"chewy-inc-chwy-deep-dive","status":"publish","type":"post","link":"https:\/\/blog.mukundmohan.online\/index.php\/2024\/07\/17\/chewy-inc-chwy-deep-dive\/","title":{"rendered":"Chewy Inc $CHWY Deep Dive"},"content":{"rendered":"\n<p><strong>Executive Summary:<\/strong><\/p>\n\n\n\n<p>Chewy, Inc. is a leading American online retailer specializing in pet supplies. The company offers a vast selection of pet food, treats, toys, and other pet-related products from various brands. Chewy is known for its excellent customer service and focus on convenience, with features like autoship and fast, free shipping.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-4-3 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"Daily Stock Analysis Chewy $CHWY The online pet store for food, treats, toys and healthcare for dogs\" width=\"640\" height=\"480\" src=\"https:\/\/www.youtube.com\/embed\/H7MSAl3-IHM?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"394\" src=\"https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/image-80-1024x394.png\" alt=\"\" class=\"wp-image-2275\" style=\"width:384px;height:auto\" srcset=\"https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/image-80-1024x394.png 1024w, https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/image-80-300x115.png 300w, https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/image-80-768x296.png 768w, https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/image-80-1536x591.png 1536w, https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/image-80-2048x788.png 2048w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n<\/div>\n\n\n<p>Chewy  reported revenue of $2.88 billion, a 3.1% increase year-over-year. Earnings per share (EPS) came in at $0.15. Net income was $66.9 million, up from $22.86 million year-over-year. <\/p>\n\n\n\n<p><strong>Stock Overview:<\/strong>&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Ticker<\/strong><strong><\/strong><\/td><td>$CHWY<\/td><td><strong>Price<\/strong><strong><\/strong><\/td><td>$26.82<\/td><td><strong>Market Cap<\/strong><strong><\/strong><\/td><td>$11.69B<\/td><\/tr><tr><td><strong>52 Week High<\/strong><strong><\/strong><\/td><td>$39.46<\/td><td><strong>52 Week Low<\/strong><strong><\/strong><\/td><td>$14.69<\/td><td><strong>Shares outstanding<\/strong><strong><\/strong><\/td><td>137.05M<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img loading=\"lazy\" decoding=\"async\" width=\"1000\" height=\"600\" src=\"https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/chewy-inc-chwy.png\" alt=\"\" class=\"wp-image-2277\" style=\"width:460px;height:auto\" srcset=\"https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/chewy-inc-chwy.png 1000w, https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/chewy-inc-chwy-300x180.png 300w, https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/chewy-inc-chwy-768x461.png 768w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \/><\/figure>\n<\/div>\n\n\n<p><strong>Company background:<\/strong><\/p>\n\n\n\n<p>Chewy, Inc. founded in 2011 by Ryan Cohen and Michael Day. The company started with bootstrapping, using the founders&#8217; own funds and some small loans, but later secured funding from venture capital firms like Volition Capital. Chewy has since grown into a pet care giant, offering a vast selection of pet food, treats, toys, and other pet-related products from over 3,500 brands. They also carry a private label line of products. Their popular Autoship subscription program ensures a steady supply of pet essentials, and fast, free shipping keeps pet parents happy.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"574\" src=\"https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/image-81-1024x574.png\" alt=\"\" class=\"wp-image-2279\" style=\"width:416px;height:auto\" srcset=\"https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/image-81-1024x574.png 1024w, https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/image-81-300x168.png 300w, https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/image-81-768x430.png 768w, https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/image-81.png 1155w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n<\/div>\n\n\n<p>Chewy&#8217;s main competitors include brick-and-mortar pet stores like Petco and Petsmart, as well as the e-commerce giant Amazon.  Chewy has carved out a strong niche in the pet care market with its focus on superior service and a curated selection of pet products. The company is headquartered in Plantation, Florida.<\/p>\n\n\n\n<p><strong>Recent Earnings:<\/strong><\/p>\n\n\n\n<p><strong>Revenue and Growth:<\/strong> Chewy&#8217;s revenue reached $2.88 billion, reflecting a modest year-over-year increase of 3.1%. <\/p>\n\n\n\n<p><strong>EPS and Growth:<\/strong> Earnings per share (EPS) came in at $0.15, exceeding analyst expectations of $0.03. This translates to a significant growth of 200% compared to the same period last year. <\/p>\n\n\n\n<p><strong>Operational Metrics:<\/strong> The company also continues to see healthy growth in its Autoship program, a subscription service that ensures recurring sales.<\/p>\n\n\n\n<p><strong>The Market, Industry, and Competitors:<\/strong><\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img loading=\"lazy\" decoding=\"async\" width=\"670\" height=\"350\" src=\"https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/image-83.png\" alt=\"\" class=\"wp-image-2286\" style=\"width:316px;height:auto\" srcset=\"https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/image-83.png 670w, https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/image-83-300x157.png 300w\" sizes=\"auto, (max-width: 670px) 100vw, 670px\" \/><\/figure>\n<\/div>\n\n\n<p>Chewy Inc. operates in the booming pet care e-commerce market, which is anticipated to reach a staggering $80.0 billion by 2030. Compound annual growth rate (CAGR) of around 8.5% between 2023 and 2030. Rising pet ownership, increasing disposable income for pet owners, and a growing preference for online shopping. This trend is expected to continue for the foreseeable future, creating a favorable environment for Chewy&#8217;s business.<\/p>\n\n\n\n<p>Chewy&#8217;s strong customer base and focus on innovation, analysts project the company to achieve a CAGR of 10.2% between 2023 and 2030. This growth is expected to outpace the overall market growth, solidifying Chewy&#8217;s position as a leader in the pet care e-commerce industry. The company&#8217;s emphasis on excellent customer service, convenience, and an expanding product portfolio are likely to be key drivers in achieving this ambitious growth projection.<\/p>\n\n\n\n<p><strong>Unique differentiation:<\/strong><\/p>\n\n\n\n<p><strong>Brick-and-Mortar Retailers:<\/strong> Petco and Petsmart are the major brick-and-mortar pet store chains in the US. While Chewy has the advantage of online convenience and a wider selection, these stores offer physical locations where pet owners can get hands-on with products, receive grooming services, and access veterinary care. They&#8217;re also increasingly building out their own online presence to compete directly with Chewy.<\/p>\n\n\n\n<p><strong>E-commerce Giants:<\/strong> Amazon is a major competitor, offering a vast selection of pet products alongside its general merchandise. While Chewy may have a more curated selection and expertise in pet care, Amazon&#8217;s brand recognition, fast shipping options, and potential bundling with other pet-related purchases can be a significant advantage.<\/p>\n\n\n\n<p><strong>Specialty Online Retailers:<\/strong> Smaller online retailers like Petflow and Pet360 cater to specific niches within the pet market, such as organic pet food or subscription boxes. These retailers can offer a more personalized experience or cater to specific dietary needs, potentially attracting customers away from Chewy.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"250\" height=\"210\" src=\"https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/image-84.png\" alt=\"\" class=\"wp-image-2287\"\/><\/figure>\n<\/div>\n\n\n<p><strong>Convenience Features:<\/strong> Chewy boasts features that streamline the pet care experience for busy pet owners. Their Autoship program ensures a steady supply of essentials, and fast, free shipping adds to the convenience factor.<\/p>\n\n\n\n<p><strong>Curated Product Selection:<\/strong> While competitors like Amazon offer a vast selection across various categories, Chewy focuses on a curated selection of pet-specific products from reputable brands. This allows them to cater more directly to pet owners&#8217; needs and offer a more specialized shopping experience.<\/p>\n\n\n\n<p><strong>Private Label Line:<\/strong> Chewy has developed its own private label line of pet products, offering customers high-quality options at competitive prices. This gives them more control over product quality and potentially increases profit margins.<\/p>\n\n\n\n<p><strong>Management &amp; Employees:<\/strong><\/p>\n\n\n\n<p><strong class=\"\">Sumit Singh (CEO):<\/strong> As Chief Executive Officer and a member of the Board of Directors, Singh has led Chewy since 2018 and steered the company through its successful initial public offering.<\/p>\n\n\n\n<p><strong>Da-Wai Hu (General Counsel):<\/strong> Overseeing legal, compliance, risk management, and other areas, Hu leads Chewy&#8217;s Legal, Risk and Corporate Responsibility Department.<\/p>\n\n\n\n<p><strong>Financials:<\/strong><\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img loading=\"lazy\" decoding=\"async\" width=\"1000\" height=\"600\" src=\"https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/chewy-inc-chwy-1.png\" alt=\"\" class=\"wp-image-2281\" style=\"width:538px;height:auto\" srcset=\"https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/chewy-inc-chwy-1.png 1000w, https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/chewy-inc-chwy-1-300x180.png 300w, https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/chewy-inc-chwy-1-768x461.png 768w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \/><\/figure>\n<\/div>\n\n\n<p>Chewy revenue has ballooned at a Compound Annual Growth Rate (CAGR) of around 25.8%. This means on average, their revenue has increased by over 25% each year. The most recent quarter (Q1 2024) showed a more modest year-over-year increase of 3.1%.<\/p>\n\n\n\n<p>EPS of $0.15 reflects a substantial increase compared to the same period last year. As a growing company, Chewy likely has a healthy amount of debt to finance its expansion. On the other hand, their consistent revenue growth indicates a strong ability to generate cash flow and meet their financial obligations.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img loading=\"lazy\" decoding=\"async\" width=\"1009\" height=\"774\" src=\"https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/image-82.png\" alt=\"\" class=\"wp-image-2282\" style=\"width:446px;height:auto\" srcset=\"https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/image-82.png 1009w, https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/image-82-300x230.png 300w, https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/image-82-768x589.png 768w\" sizes=\"auto, (max-width: 1009px) 100vw, 1009px\" \/><\/figure>\n<\/div>\n\n\n<p><strong>Technical Analysis:<\/strong><\/p>\n\n\n\n<p>A large base (stage 1) forming on the monthly and weekly charts with a cup and handle (bullish) on the daily chart makes this a good stage 2 markup candidate. There is resistance in the $28 zone, so this should head lower short term to $25 &#8211; $26 range.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"793\" src=\"https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/image-91-1024x793.png\" alt=\"\" class=\"wp-image-2304\" srcset=\"https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/image-91-1024x793.png 1024w, https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/image-91-300x232.png 300w, https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/image-91-768x595.png 768w, https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/image-91-1536x1190.png 1536w, https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/image-91-2048x1587.png 2048w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p><strong>Bull Case:<\/strong><\/p>\n\n\n\n<p><strong>Customer-Centric Approach:<\/strong> Chewy prioritizes exceptional customer service, offering features like 24\/7 support with pet experts and convenient features like Autoship. This focus on building relationships and providing expert advice differentiates them from competitors.<\/p>\n\n\n\n<p><strong>Expanding Services:<\/strong> Beyond just products, Chewy is venturing into services like Chewy Pharmacy, tele-triage consultations with vets, and upcoming Chewy Vet Care physical practices. This strategy aims to become a one-stop shop for all pet needs, further increasing customer loyalty and potentially boosting revenue streams.<\/p>\n\n\n\n<p><strong>Short Squeeze Potential:<\/strong> The high short interest in Chewy&#8217;s stock (as of July 2024) creates the potential for a short squeeze. If the stock price starts to rise, short sellers may be forced to buy back shares to cover their positions, further driving the price up.<\/p>\n\n\n\n<p><strong>Bear Case:<\/strong><\/p>\n\n\n\n<p><strong>Economic Downturn:<\/strong> A potential economic downturn could lead to decreased consumer spending, especially on discretionary items like pet products. This could negatively impact Chewy&#8217;s sales growth and overall financial performance.<\/p>\n\n\n\n<p><strong>Rising Costs:<\/strong> Inflationary pressures and rising costs of goods sold could squeeze Chewy&#8217;s margins. The company might struggle to pass on these cost increases entirely to consumers, potentially impacting profitability.<\/p>\n\n\n\n<p><strong>Limited Market Diversification:<\/strong> Chewy is heavily reliant on the pet care e-commerce market. If this market doesn&#8217;t grow as fast as expected, or if consumer preferences shift, Chewy&#8217;s business could be adversely affected.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Executive Summary: Chewy, Inc. is a leading American online retailer specializing in pet supplies. The company offers a vast selection of pet food, treats, toys, and other pet-related products from various brands. Chewy is known for its excellent customer service and focus on convenience, with features like autoship and fast, free shipping. Chewy reported revenue&#8230;<\/p>\n","protected":false},"author":1,"featured_media":2275,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[11],"tags":[],"class_list":["post-2273","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stocks"],"jetpack_featured_media_url":"https:\/\/blog.mukundmohan.online\/wp-content\/uploads\/2024\/07\/image-80.png","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/blog.mukundmohan.online\/index.php\/wp-json\/wp\/v2\/posts\/2273","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.mukundmohan.online\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.mukundmohan.online\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.mukundmohan.online\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.mukundmohan.online\/index.php\/wp-json\/wp\/v2\/comments?post=2273"}],"version-history":[{"count":8,"href":"https:\/\/blog.mukundmohan.online\/index.php\/wp-json\/wp\/v2\/posts\/2273\/revisions"}],"predecessor-version":[{"id":2305,"href":"https:\/\/blog.mukundmohan.online\/index.php\/wp-json\/wp\/v2\/posts\/2273\/revisions\/2305"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.mukundmohan.online\/index.php\/wp-json\/wp\/v2\/media\/2275"}],"wp:attachment":[{"href":"https:\/\/blog.mukundmohan.online\/index.php\/wp-json\/wp\/v2\/media?parent=2273"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.mukundmohan.online\/index.php\/wp-json\/wp\/v2\/categories?post=2273"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.mukundmohan.online\/index.php\/wp-json\/wp\/v2\/tags?post=2273"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}