CHWY stock declines sharply this year as macro pressures and competition offset strong subscription revenue and cash flow gains.
Chewy Inc. (NYSE: CHWY) has fallen more than 40% year-to-date, trading below its 2019 IPO price despite a 24% increase in free cash flow for fiscal 2025. The decline reflects broader concerns over discretionary pet spending and competitive threats from Amazon and Walmart, which are eroding margins in a price-sensitive market.
The company’s Autoship subscription program, which drives 83% of total revenue, grew 12% last year, outpacing overall revenue growth of 6%. However, analysts warn that AI-driven shopping agents could disrupt Chewy’s ad business, further pressuring its already thin margins. The pet retail sector remains under strain as consumers prioritize essentials over premium offerings.
Shares now reflect skepticism about Chewy’s ability to sustain growth amid intensifying competition and macroeconomic headwinds. The stock’s underperformance contrasts with its improving cash flow metrics, highlighting investor concerns over long-term profitability.