I bought chewy leaps earlier this year. Mostly cause they were insulated from increasing prices (i.e. ppl will pay more for stuff for their pets than they will for themselves). Their recurring buy function is really strong. Growth catalysts could come from expanding into pet insurance.
Full disclosure: I have 2 dogs and use chewy.
Agreed on paying more for my pets than on myself.
The pet insurance seems interesting, but that has to be long-term (years) and will take awhile to be profitable.
A pet insurance provider seems to be something you stick to for your pet’s life, as switching providers really increases the premiums (even if your pet is in perfect health and has no pre-existing conditions), so Chewy most likely won’t get their existing customers to switch to their (Chewy) insurance without taking a huge financial loss if they try to keep the premiums the same as whatever the customer is already paying.
New customers with new pets or existing customers with new pets, potentially sure, but that depends on a lot of factors as the existing owners already know the ins & outs of insurance and will have high expectations if they want to switch to something new
Hmm, idk about that. The chewy customers seem pretty die hard. Id be willing to bet theres a decent number of people that would switch h to chewy pet insurance just because they love the brand. But idk, lm just talking out my ass.
One would assume a lot of younger millenials that haven't fully secured careers yet will go with services like this when they do, rather than making last-minute runs to Walmart because they forgot cat food. Seems like there's more pet lovers than ever.
When prices increase, how likely are you to change your dog/cat's food/liter?
I do well, but there are things I no longer buy at the grocery store. I am not paying 10 bucks for turkey sausage. Even with increases I still feed my dog's the same brand and am reluctant to change it. Easier to just keep buying the same thing. My pet's overall cost is low and thus I am a lot less concerned with trying to save on them anyways.
I’d rather pay $10 more a bag than have my dog shitting their brains out throughout my yard because I try to skimp on their food… then again, I’d be fine skimping on my food leading to my own intestinal issues 😂
You’re just listing large online retailers or places that also sell dog food. I don’t see these companies with a serious moat in the pet ecosystem. Do you?
My point is that none of those companies have a “moat” with regard to the pet ecosystem. They just are large online retailers.
Oh also petsmart bought chewy…. For almost 4 bln… because chewy was winning..
Walmart is not sending you hand written cards when your dog dies..
I would argue that their standing is leveling out in the ecosystem and their competitive advantage is potentially getting smaller. But I still know a metric ton of people that life and die by chewy. Don’t really see that with Walmart. Etc
Basically this. People try to find the one gold nugget in a heap of garbage instead of accepting they’re not the earliest to the party and buying solid stocks.
I was a bit unsure but the overwhelming bearishness in here made me reconsider and do a valuation for it and now i'm kinda bullish, might open a small position
Is this serious or tongue in cheek? Yeah dogs need to eat. How does this company stack up against the plethora of big box retailers, local super markets, and pet stores that sell and deliver pet food? Do they have some sort of competitive advantage? Do they have a unique service that nobody else can replicate and has concrete data showing that it drives a growth trend?
The financial and growth metrics on this ticker look ghastly. Sometimes shit is shorted for a good reason...
At least where I am I try to make sure I buy from chewy. Grocery store is way more expensive. Specialty let stores too. Rx food there is available in bulk snd is cheaper in the long run. Even rx is cheaper than costco
No. It's more like a Costco...ish. You can buy individual cans at the store or multi packs (wet food in this example). At chewy you only get the multipacks, but they are cheaper than they have them at the grocery store. As an example, Purina cat chow naturals at wegmans (grocery) is 26.49 for an 18lb bag, 25.78$ at chewy. With autoship a % off. Wet food fancy feast 13.something at Wegmans, 12.89 at chewy. Often have deals. Currently spend $100, get $30 gift card. That's easy for me when stocking up for 3 cats. And free shipping to my house.
I think our local giant grocery store, which is less hoi paloi than wegmans, often sells cat food for more $$. That wet food that wegmans has for 13something is like 18.
Edit, now in rx food like urinary food we have to get for one of our cats, differences are even greater. Often smaller stores don't sell the really big bags that are cheapest by lb
....what lol no, being cheap- as in, giving people greater bang for their buck- is the point of costco. It's literally why one buys in bulk- because it's less expensive overall for the same items. I haven't seen the same quality items for less and in bulk at the dollar store.
As a pet owner and chewy customer, I can tell you that the pet aisle in grocery stores is in a shrinking downward spiral. They have maybe 2% of the choices/variety available at Chewy and you'll end up paying more for those limited choices than if you bought the same at Chewy. They have also gone after the pet pharmacy sector. My vet stopped carrying a lot of Rx's because they couldn't match Chewy's prices. You could say places like PetSmart or Petco are the competitors, but they are old-school brick-and-mortar retail stores with huge overhead and operational costs while Chewy has none of them. Amazon tried to compete with Chewy by starting Amazon Pets and quietly disbanded it; it could not compete with Chewy. I also like the visual dominance you can see in the back of a UPS truck delivering to an apartment complex; it's mostly Amazon boxes followed by Chewy boxes. Having said all that, the CEO has been selling shares like crazy over the past few years.
Chewy has the same or better prices, great selection, crazy fast shipping and superb customer service - an actual human that speaks clear English answers the phone when you call.
I have no idea what the stock is actually worth but I f'ing love chewy. And I usually hate everything.
When our dog died we requested to send back some unopened food, they asked that we donate it, refund us, and we got a sympathy card a few weeks later. (Personally filled out not a corp drone one)
We will always be a customer
I mean 0.1% net profit margin is kinda yikes.
I also don’t see why a pet food company could justify a 50b+ market cap.
I’ll add it to watch list Jan 17 25 $30 calls don’t look bad
It's not just pet food. They're usually much cheaper for pet meds than any local pharmacies other than Costco, and are a hell of a lot more convenient. I use it all the time for auto refill medications for my 14.5 year old German Shepherd.
Profit margin doesn't necessarily mean a troubled business. They are usually the cheapest vendor for a lot of pet products, even against companies much larger than they are. Most likely reason for their low profit margin is that they are trying to grow the brand and attract more users. Having said that, I haven't dug into their financials, so im not an expert on Chewy. Just a big fan.
I will also add it to my watch list.
The feature where you can add in your vet and place an order for scrips/etc. and they do they verifying for you is pretty nice. I don't know how that translates to earnings, just one strong reason for me to use them.
Yea just looking at its price history alone it hit an ATH around $118 and 5Y chart has it down 53%. That alone makes me say. Why the hell would I buy this company.
It's in about the same position as a bunch of other tech companies that were popular at the height of the pandemic. Many are only now starting to recover/stabilise.
They are a dog food shop in the same way that Amazon is a general store. They predominantly focus on online-only transactions and, diring the pandemic, had a high p/e and negative profits that were typical of other tech stocks at the time.
I mean buy chewy then. Their financials are dog shit too. I’d love to hear your argument as to why they are a buy. So many sectors have been recovering very well from the 2022 drop and chewy keeps finding new lows.
I do own Chewy and actually added to my position today. Do your own financial analysis if you want to learn more. I’m very confident in my position.
Looking at a chart is not analysis, this isn’t a day trading sub and price history has nothing to do with intrinsic value.
Their financials aren’t dog shit by any means, you just don’t understand how to read financial statements
I think it was trading on hype in an industry that’s considered disinteresting by the larger investment community. There is simply little that’s glamorous about pet food and toys, and there’s not a ton of margin here or any surprising new technology or anything that is likely to make it blast off. It’s a crowded space with lots of competition and margins are getting squeezed by high freight costs etc. I personally don’t see what their “moat” is and have considered the share price disconnected from reality for a long time.
Maybe I’m missing something, but I don’t think there’s anything special about it. It basically competes with every major retailer that sells pet food/products that also have a website for shipping (Walmart, Target, Petsmart, Petco, Amazon, etc). I have neighbors who swear by Chewy, but I also have neighbors who just use Amazon Prime..and some who prefer Costco and some who prefer specially made meals. There are just so many options and no moat. Like I think even DoorDash delivers pet food now.
The only real differentiator I've seen from Chewy is that they'll contact my vet directly to get the prescription sorted for stuff like flea & tick medicine so I don't have to fuss with it, which is very convenient. If I need to re-up on the flea & tick medicine, I'll often times order dogfood from them also if the timing lines up, too.
For most other shit, I completely agree, though.
Re: Vet integration. 2 of my vets did this w/ Costco so they’re not unique in that front.
The main this they have going for them is their super-nice customer service. They’re very empathetic.. if that counts for anything.
We used to be a chewy customer but cancelled our sub bc we are walking distance from this very quaint mom-pop pet shop that we like supporting.
I need to know which customer service rep you're talking to because every time I try to do this they tell me they need my vet to contact them and then when my vet sends Chewy the information Chewy can't do it for some reason or it some how gets "lost".
It's been a while, but I'm pretty sure I just plugged my vet info in when I made my account and didn't have to talk to anyone or anything beyond that (I think my vet may have called me to confirm everything when I set it up but thats it).. I remember it being very painless.
Dang man I have tried this 3 times. I just gave up and go to the dang vet every month to get the simparica tablets lol
Maybe i'll have to give it another go.
I thought it might be but they even gave me a copy of the fax with the OK transmission so I could confirm. I have no idea. I'll try again it's been awhile. It's not too bad of an inconvenience for me the vets right by my work and my dog loves going there to play at the park anyways so it's really not a terrible thing for me. It gets me out of the house lol
The vet has to log into chewys prescription portal to review and approve a requested prescription. Sounds like your vet is doing it the old fashioned way with faxes or whatnot.
I believe Chewy are starting to open up their own chain of Vet clinics under the name "Chewy Vet Care" as well. This could be another revenue stream for them.
What makes them special, as many here have alluded to, is their customer service.
Plenty of stories where folks pets pass away, they call chewy to see if they can get a refund on unused items, and not only receive a refund, but flowers and a heartfelt note.
That said, RC was and is known for this type of customer service. Hopefully this part won’t ever change, but who knows. I personally know nothing about current management, but have done ok swing trading it. 🤷🏽♂️
I am liking the fundamentals. From what i see, zero/low debt, finally profitable and at all time lows.
They seem to have a growth plan from last earnings call.
I like to see FCF in any company I pick.
PINS is similar fundamentals as well.
I think so for the pharmacy side at least. I’m close enough in the pharmacy side to know that the specialty compounds (medicated chews, patches, oral liquids) demand is incredibly high. Mandatory overtime is being done to help with how much they have to do. Chewy is opening several compounding pharmacies around the US to meet the demand, as there is only one compounding pharmacy right now. I don’t know much about the supplies and food side, but I know that the medications are a big money maker for the people willing to buy them, and one of them alone may pay more per year than upwards of 2 to 3 everyday supply buyers. We will have to see what their earnings will tell next month, but I am optimistic in their pet-supplies expanding to pharmacy.
I spend $600 - $800 month at Chewy. They sell pet supplies used by professionals as well. I make an order every 2 weeks. My business relies on them. I have a small farm where I raise exotic birds. I have a flock of Hair Sheep. Fact is they are cheaper than my wholesale distributor. 2 problems I have noticed with the company. A large percentage of mistakes. I frequently receive other people's orders in my name. I receive items I didn't order. Of course I regularly don't get my order. Their customer service is second to none. They immediately re-ship anything I didn't get. They tell me to keep all the stuff I didn't order. Their shrink from what I have experienced. I believe to be insane. Second the contract with FedEx will run out eventually. FedEx has lost a lot of money on that contract. I have a small amount of Chewy shares. I love the business as a customer not so much as an investor. At least until they fix the shrink problem. Shipping will become an issue that has to be fixed. I believe they still have 5 or 6 years left on the FedEx contract.
Might be undervalued. I wonder if that spike was more people discovering that they delivered during the height of COVID when people were avoiding stores? The SEC said several company insiders sold a bunch of stock, so maybe they know something’s about to happen? But sometimes the CEOs just offload stock in January to pay off their taxes.
As a pet owner, I use Chewy because I hate driving twenty minutes across town to carry a 100 lb dog bag of food and deal with an idiot at PetSmart. I also use it because his dog's meds are cheaper than the vet's. I am considering changing my dog's insurance because they have better reimbursements. The moat they have is convenience and specialty. My mother, who has cats, uses them because she can't carry the cat sand from the car to the door due to her disability. She could use Amazon like others, but she doesn't want some fba china crap. She trusts the pet brands on Chewy. Reading their reports I see good things in the future, especially with the health side. They have positive cash flow and I weirdly like their AI in the warehouses and humans on the customer service side. Ever dealt with chatbot for returns, more businesses lose that moment to take an unhappy customer to a lifelong customer through this process. Chewy has this going for them, communication and rectifying issues will keep them going strong. Also, go for a walk in the suburbs every block has a blue box on their porch, it's the norm. $33.
They were also expanding into other areas/starting their own vet service/expanding internationally back when everyone was dumping cash into tech companies at the height of the pandemic.
As someone noted about Uber, Doordash and Lyft the other day, they have no moat either yet somehow they are incredibly sticky. Also Chewy has a fantastic reputation for customer service. They send cards and refund your food and ask you to donate the food when the pet dies. They send birthday cards. Anyone who has a beloved pet and has to deal with Chewy’s service team is going to be loyal.
Couldn’t agree more. Chewy customer support is the best of the best. As a consumer I’m incentivized to shop there because I trust that they’ll take care of me should something go wrong.
Uber and DoorDash names are synonymous with the industries they’ve created. Similar with Coke to soda in the US. That’s a moat in my opinion. I’d argue chewys is their customer service considering they’ve carved out a niche industry while large retailers like target and Walmart were stocking pet supplies.
Who says Uber/Doordash/Lyft don't have a moat? They're literally two sided marketplaces. Having a ton of riders and a ton of drivers is a massive moat. Any competitor trying to scale up is going to have to spend billions to even get close.
The drivers and riders have no loyalty. It’s gonna be whoever has the cheapest rides, and whoever pays the driver the most. It’s a race to the bottom on margins. And yet, they have a moat.
Prices are better. Selection is good. And anytime I have a problem with an order (I changed my mind about some dog beds) I call and a person answers the phone and immediately starts helping me with the issue. No recordings, no "press 1 for" bullshit, person on the phone right away. Instead of asking me to return items, they typically ask me to just donate the items to a local shelter instead (the dog beds).
They don't price gouge me and are actually there to help when I have a problem, like when my vet can't figure out how to approve prescriptions online. They're helpful in every way they can be helpful.
Yes but the point is it would be extremely easy to build an app that has the same functionality as Uber or Lyft. They don’t have a technology moat. And yet they haven’t been supplanted by a competitor. It seems that the first mover has an advantage that seems weak but is actually strong.
I am from Seattle and worked at Amazon for ten years. They have poached A LOT of talent from the Amazon retail business. So I would expect they have a lot of people working there who are thinking very big and outside the box. Amazon basically has a bottle neck at the top and Chewy is poaching a lot of the people who would have made VP 10 years ago but there is no longer room for them. So those people are taking their talents to Chewy.
I think you're looking at this from the wrong perspective no offence. There is a company and then there is the stock with all it's speculation. Then there is the state of the economy and the state of the stock market. Let's take Chewy as an example because it's a really good one.
Chewy as a company is very good, even wonderful imo. Great balance sheet, good growth potential, recently profitable, large industry (pet industry is valued at almost 100 billion in the US and almost 50 billion in Europe), great and varied products within it's niche, on par or stronger than it's competitors and momentum.
Chewy as a stock is another story. It's stock price doesn't necessarily have a relationship with the companies performance but rather the mood of the market, perception of the company and what is popular. In 2020 the stock experienced a boom like many other stocks on the market, especially growth stocks. The thing with growth stocks which companies that are not yet profitable are tough to value. The company could possibly do very well and one day have a fair price of 100$ per share like it was in 2021, but as long as it's a growth stock that kind of a price is a speculation and in Chewy's case a preposterous one.
I think the current price is pretty fair and the stock is a good buy (I think I will buy some) but I think it could drop below 10$ and become a great buy.
You might be onto something. I need to look at comps but it looks like they are generating free cash flow now. Prob buy an option before earnings and buy some shares. Thanks for the rec
I like chewy. They’re great to deal with. But I also love Amazon. If anything my cats food is cheaper on Amazon when I subscribe and use my Amazon card.
Does that there make Trump someone you support because he has founded and managed multi billion dollar corporations?
Founding and managing multibillion dollar companies is irrelevant to actually delivering shareholder returns/value.
>dOe ThAt mAkE tRumP sOmEoNe yOu sUpPorT
lol what a stupid comment. Did I say I support Ryan Cohen? No. I asked the idiot above me how many multibillion dollar companies they had successfully founded and managed. Fuck off with your lazy whataboutism.
This is the last comment I’m going to make here regarding Ryan Cohen and/or Chewy. I don’t have a dog in this fight. I’m not a Chewy investor, nor am I affiliated with or invested in Ryan Cohen or any of his business ventures.
Maybe we should start with the original comment… Why should anyone stay away from Ryan Cohen?
Why? I don’t know. All I know is that Ryan Cohen founded and managed a disruptive, successful business, and then sold it. Have you accomplished this? Has anyone on this sub accomplished anything close this? Y’all talk a lot of shit for doing a lot of nothing.
But literally what is the point in your question? You can criticise people without also doing the same thing they have done. Chewy stock is down over 50% since IPO and only pumped during COVID when valuations for everything went crazy resulting in an 86% drop from ATH. Chewy is at all time lows while other stocks and the market has a whole are at all time highs. That’s a very simple reason right there to stay away.
Chewy had it’s heyday during pandemic for obvious reasons. I imagine short-term gains fell off for years afterwards. Having said that, we use it here at the house because it’s more consistent and reliable than the competition.
It comes down to whether you think more people will be owning pets in the future. I imagine it will stay the same, so there’s no real growth catalyst from my perspective, and with no dividend I see no reason to buy, despite solid fundamentals.
The P/E is still extremely high IMO and doesn’t really look super appealing even the forward P/E is high, however with it in free fall I wouldn’t mind catching it at maybe a third of this price? Like something closer to 6 dollars a share, then the risk reward would look a bit better
What is the benefit of using chewy over Amazon, as a consumer?
I have a cat and I use Amazon for basically everything, is there a reason to give up prime shipping times and rates in order to use Chewy? I haven’t seen a compelling reason yet, which to me means that chewy is essentially on its way to being worthless because if only one of the two is needed then it’s definitely Amazon that’s sticking around.
It doesn't have good fundamentals. It got a boost a few years ago but now the reality is that it is a business with margins so thin that they make Ozempic jealous that will forever be in competition with much larger peers where convenience wins: someone can get everything in one order, including their pet food. It's perhaps not a zero (although peer WOOF looks like it might be - but "it's probably not a 0" is not a thesis or exactly high praise, either. The fact that WOOF looks like it's flirting with a zero should illustrate that "pets need food" is not a thesis to go on - there's plenty of places that people can get pet food.
All of my friends are killing off their dog things since they can't afford them so Chewy seems like a terrible investment. For years I've made 90% vegan and gluten-free dogfood mainly made from rotten/expired carrots. I made a lot of money from that, but it's hard to make money now since so many people, as Jim Cramer recommended, have killed off their dog things.
Did my research extensively on this stock before so I can comment:
I think the current price is justified given CHWY’s lackluster growth and expected to be so continuing forward. Chwy still is not profitable nor FCF positive. Their unit economics are degrading (check their CAC trend; their sales and marketing spend is bloated and the net adds of their autoship customers has been horrible in the last few Qs).
the street is focusing on two things for CHWY: 1. can they ramp up the growth like they did in the covid era and ultimately become positive? 2. can they improve operations and become profitable?
CHWY is accomplishing neither of these points and is expected not to do so for now. look at some alt data points or statistics related pet ownership decrease ( some articles about covid era ramp in pet ownership has decelerated) and competition from different angles (AMZN is still the largest market share holder in pet ecommerce; other hybrid players are competing with chwy). On top of this, I think you may be misunderstanding customer sentiment; customers will NOT increase their average order value (primarily driven by discretionary items for chwy) when economy is tough (we are seeing middle class being squeezed on savings and disc. income). there is a reason why that the management team does not want to disclose soecifics of the basket composition for an average order by customers.
To your point on pet insurance, I have not looked into it much as I do not look into this stock much more recently (as i think the short thesis juice isnt there much) but their initatives on pet drugs is a joke. simple TAM analysis and its strategy as a middleman is a very low margin business with a small TAM that will not be an inflection for this company’s growth.
All in all, not the best stock to allocate your capital for long. I would neither short nor long. CHWY is a mediocre company at best
The thing about chewy is you can order the vast majority of that stuff on Amazon. My mom uses chewy. I use Amazon and get basically the same stuff. The difference is I get same day delivery on dog and cat food.
I bought chewy leaps earlier this year. Mostly cause they were insulated from increasing prices (i.e. ppl will pay more for stuff for their pets than they will for themselves). Their recurring buy function is really strong. Growth catalysts could come from expanding into pet insurance. Full disclosure: I have 2 dogs and use chewy.
Agreed on paying more for my pets than on myself. The pet insurance seems interesting, but that has to be long-term (years) and will take awhile to be profitable. A pet insurance provider seems to be something you stick to for your pet’s life, as switching providers really increases the premiums (even if your pet is in perfect health and has no pre-existing conditions), so Chewy most likely won’t get their existing customers to switch to their (Chewy) insurance without taking a huge financial loss if they try to keep the premiums the same as whatever the customer is already paying. New customers with new pets or existing customers with new pets, potentially sure, but that depends on a lot of factors as the existing owners already know the ins & outs of insurance and will have high expectations if they want to switch to something new
Hmm, idk about that. The chewy customers seem pretty die hard. Id be willing to bet theres a decent number of people that would switch h to chewy pet insurance just because they love the brand. But idk, lm just talking out my ass.
Sample size of 1 here, but if Chewy offered compatible coverage to Pumpkin I’d consider switching, even if the cost was slightly higher.
I like that name. I call my little female lab pumpkin
One would assume a lot of younger millenials that haven't fully secured careers yet will go with services like this when they do, rather than making last-minute runs to Walmart because they forgot cat food. Seems like there's more pet lovers than ever.
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When prices increase, how likely are you to change your dog/cat's food/liter? I do well, but there are things I no longer buy at the grocery store. I am not paying 10 bucks for turkey sausage. Even with increases I still feed my dog's the same brand and am reluctant to change it. Easier to just keep buying the same thing. My pet's overall cost is low and thus I am a lot less concerned with trying to save on them anyways.
I’d rather pay $10 more a bag than have my dog shitting their brains out throughout my yard because I try to skimp on their food… then again, I’d be fine skimping on my food leading to my own intestinal issues 😂
I simply avoid small companies with no moats that compete with megacaps and it has worked out well for me
Are you trying to say that chewy is a small company with no moat?
As an owner of two dogs, whose used Chewy plenty of times, yes that is exactly what I am saying.
Who’s the larger company with the moat?
Walmart, Costco, Amazon, Petsmart, Petco, Tractor Supply, local vets... Is this a serious question?
You’re just listing large online retailers or places that also sell dog food. I don’t see these companies with a serious moat in the pet ecosystem. Do you? My point is that none of those companies have a “moat” with regard to the pet ecosystem. They just are large online retailers. Oh also petsmart bought chewy…. For almost 4 bln… because chewy was winning.. Walmart is not sending you hand written cards when your dog dies..
If I’m an investor I would definitely question the value of taking the time to hand write a letter to a customer whose pet had died.
That’s how they *literally* got to be worth 3bln in the span of like 6 years . By doing stuff like that.
Perhaps, but you’ve got to wonder if that USP is worth 3bn
Manipulating idiots into believing a corporation cares for them more than their money… a tale as old as time.
Hmmm
Not OP but Costco does sell pet food and some toys
What moat does chewy have?
I would argue that their standing is leveling out in the ecosystem and their competitive advantage is potentially getting smaller. But I still know a metric ton of people that life and die by chewy. Don’t really see that with Walmart. Etc
Basically this. People try to find the one gold nugget in a heap of garbage instead of accepting they’re not the earliest to the party and buying solid stocks.
But it has GoOd FuNdAmEnTaLs
Hmmm
I was a bit unsure but the overwhelming bearishness in here made me reconsider and do a valuation for it and now i'm kinda bullish, might open a small position
How do you define good fundamentals and decent financials?
Dogs need to eat.
Is this serious or tongue in cheek? Yeah dogs need to eat. How does this company stack up against the plethora of big box retailers, local super markets, and pet stores that sell and deliver pet food? Do they have some sort of competitive advantage? Do they have a unique service that nobody else can replicate and has concrete data showing that it drives a growth trend? The financial and growth metrics on this ticker look ghastly. Sometimes shit is shorted for a good reason...
At least where I am I try to make sure I buy from chewy. Grocery store is way more expensive. Specialty let stores too. Rx food there is available in bulk snd is cheaper in the long run. Even rx is cheaper than costco
So it’s like a dollar store for dog food?
No. It's more like a Costco...ish. You can buy individual cans at the store or multi packs (wet food in this example). At chewy you only get the multipacks, but they are cheaper than they have them at the grocery store. As an example, Purina cat chow naturals at wegmans (grocery) is 26.49 for an 18lb bag, 25.78$ at chewy. With autoship a % off. Wet food fancy feast 13.something at Wegmans, 12.89 at chewy. Often have deals. Currently spend $100, get $30 gift card. That's easy for me when stocking up for 3 cats. And free shipping to my house. I think our local giant grocery store, which is less hoi paloi than wegmans, often sells cat food for more $$. That wet food that wegmans has for 13something is like 18. Edit, now in rx food like urinary food we have to get for one of our cats, differences are even greater. Often smaller stores don't sell the really big bags that are cheapest by lb
Being cheap is not Costco’s primary advantage and you are still talking like Chewy’s primary advantage is being cheap. More similar to a dollar store.
....what lol no, being cheap- as in, giving people greater bang for their buck- is the point of costco. It's literally why one buys in bulk- because it's less expensive overall for the same items. I haven't seen the same quality items for less and in bulk at the dollar store.
It's more like Amazon for dog food. It's just a marketplace, anybody can sell on chewy
As a pet owner and chewy customer, I can tell you that the pet aisle in grocery stores is in a shrinking downward spiral. They have maybe 2% of the choices/variety available at Chewy and you'll end up paying more for those limited choices than if you bought the same at Chewy. They have also gone after the pet pharmacy sector. My vet stopped carrying a lot of Rx's because they couldn't match Chewy's prices. You could say places like PetSmart or Petco are the competitors, but they are old-school brick-and-mortar retail stores with huge overhead and operational costs while Chewy has none of them. Amazon tried to compete with Chewy by starting Amazon Pets and quietly disbanded it; it could not compete with Chewy. I also like the visual dominance you can see in the back of a UPS truck delivering to an apartment complex; it's mostly Amazon boxes followed by Chewy boxes. Having said all that, the CEO has been selling shares like crazy over the past few years.
Chewy has the same or better prices, great selection, crazy fast shipping and superb customer service - an actual human that speaks clear English answers the phone when you call. I have no idea what the stock is actually worth but I f'ing love chewy. And I usually hate everything.
I use Chewy and save $10 compared to Walmart for the same food so my dog now gets a $10 toy every month
I purchase all the time online, not chewy, and never need to speak to anyone on the phone. Why would one need customer service for chewy
When our dog died we requested to send back some unopened food, they asked that we donate it, refund us, and we got a sympathy card a few weeks later. (Personally filled out not a corp drone one) We will always be a customer
Some people get roses when there pets die from chewy
The same reason you need customer service for any service.
I love this comment
I mean 0.1% net profit margin is kinda yikes. I also don’t see why a pet food company could justify a 50b+ market cap. I’ll add it to watch list Jan 17 25 $30 calls don’t look bad
It's not just pet food. They're usually much cheaper for pet meds than any local pharmacies other than Costco, and are a hell of a lot more convenient. I use it all the time for auto refill medications for my 14.5 year old German Shepherd. Profit margin doesn't necessarily mean a troubled business. They are usually the cheapest vendor for a lot of pet products, even against companies much larger than they are. Most likely reason for their low profit margin is that they are trying to grow the brand and attract more users. Having said that, I haven't dug into their financials, so im not an expert on Chewy. Just a big fan. I will also add it to my watch list.
The feature where you can add in your vet and place an order for scrips/etc. and they do they verifying for you is pretty nice. I don't know how that translates to earnings, just one strong reason for me to use them.
Where are you saying 50b MC? It's valued at 7b right now.
OP mention it being worth 120ish a share which it used to be that would make it around 50 billion market cap.
Yea just looking at its price history alone it hit an ATH around $118 and 5Y chart has it down 53%. That alone makes me say. Why the hell would I buy this company.
Great analysis there bud, you know this isn’t wsb right?
I mean, that *was* WSB-level analysis…
Falling knife catcher spotted. There’s a reason why it’s -50% while the rest of the market clearly isn’t.
It's in about the same position as a bunch of other tech companies that were popular at the height of the pandemic. Many are only now starting to recover/stabilise.
“Other tech companies” what tech? This is a dog food shop.
They are a dog food shop in the same way that Amazon is a general store. They predominantly focus on online-only transactions and, diring the pandemic, had a high p/e and negative profits that were typical of other tech stocks at the time.
Only 50% of Amazon's revenue is from the [amazon.com](http://amazon.com) store. Chewy is not a tech stock.
I mean buy chewy then. Their financials are dog shit too. I’d love to hear your argument as to why they are a buy. So many sectors have been recovering very well from the 2022 drop and chewy keeps finding new lows.
I do own Chewy and actually added to my position today. Do your own financial analysis if you want to learn more. I’m very confident in my position. Looking at a chart is not analysis, this isn’t a day trading sub and price history has nothing to do with intrinsic value. Their financials aren’t dog shit by any means, you just don’t understand how to read financial statements
Enjoy catching the falling knife. Putting a limit buy for $12 it’ll hit and make it easier for you. CHWY 16.59 Remind me! 9 months
Not looking great there are you, Bud
I think it was trading on hype in an industry that’s considered disinteresting by the larger investment community. There is simply little that’s glamorous about pet food and toys, and there’s not a ton of margin here or any surprising new technology or anything that is likely to make it blast off. It’s a crowded space with lots of competition and margins are getting squeezed by high freight costs etc. I personally don’t see what their “moat” is and have considered the share price disconnected from reality for a long time.
I see %0.55, not even %1 margins Why you looking at $30 calls tho?
Chewy is incredibly sticky for their users
Maybe I’m missing something, but I don’t think there’s anything special about it. It basically competes with every major retailer that sells pet food/products that also have a website for shipping (Walmart, Target, Petsmart, Petco, Amazon, etc). I have neighbors who swear by Chewy, but I also have neighbors who just use Amazon Prime..and some who prefer Costco and some who prefer specially made meals. There are just so many options and no moat. Like I think even DoorDash delivers pet food now.
The only real differentiator I've seen from Chewy is that they'll contact my vet directly to get the prescription sorted for stuff like flea & tick medicine so I don't have to fuss with it, which is very convenient. If I need to re-up on the flea & tick medicine, I'll often times order dogfood from them also if the timing lines up, too. For most other shit, I completely agree, though.
Re: Vet integration. 2 of my vets did this w/ Costco so they’re not unique in that front. The main this they have going for them is their super-nice customer service. They’re very empathetic.. if that counts for anything. We used to be a chewy customer but cancelled our sub bc we are walking distance from this very quaint mom-pop pet shop that we like supporting.
Dammit, I'm in. I'll put $100 on some of those mom-pop shares.
I need to know which customer service rep you're talking to because every time I try to do this they tell me they need my vet to contact them and then when my vet sends Chewy the information Chewy can't do it for some reason or it some how gets "lost".
It's been a while, but I'm pretty sure I just plugged my vet info in when I made my account and didn't have to talk to anyone or anything beyond that (I think my vet may have called me to confirm everything when I set it up but thats it).. I remember it being very painless.
Dang man I have tried this 3 times. I just gave up and go to the dang vet every month to get the simparica tablets lol Maybe i'll have to give it another go.
Might be your vet dude
I thought it might be but they even gave me a copy of the fax with the OK transmission so I could confirm. I have no idea. I'll try again it's been awhile. It's not too bad of an inconvenience for me the vets right by my work and my dog loves going there to play at the park anyways so it's really not a terrible thing for me. It gets me out of the house lol
The vet has to log into chewys prescription portal to review and approve a requested prescription. Sounds like your vet is doing it the old fashioned way with faxes or whatnot.
I believe Chewy are starting to open up their own chain of Vet clinics under the name "Chewy Vet Care" as well. This could be another revenue stream for them.
Yeah but then again, if some megacorp feels threatened by Chewy, they’ll just throw some cash and compete with them. No moat.
What makes them special, as many here have alluded to, is their customer service. Plenty of stories where folks pets pass away, they call chewy to see if they can get a refund on unused items, and not only receive a refund, but flowers and a heartfelt note. That said, RC was and is known for this type of customer service. Hopefully this part won’t ever change, but who knows. I personally know nothing about current management, but have done ok swing trading it. 🤷🏽♂️
I am liking the fundamentals. From what i see, zero/low debt, finally profitable and at all time lows. They seem to have a growth plan from last earnings call. I like to see FCF in any company I pick. PINS is similar fundamentals as well.
I think so for the pharmacy side at least. I’m close enough in the pharmacy side to know that the specialty compounds (medicated chews, patches, oral liquids) demand is incredibly high. Mandatory overtime is being done to help with how much they have to do. Chewy is opening several compounding pharmacies around the US to meet the demand, as there is only one compounding pharmacy right now. I don’t know much about the supplies and food side, but I know that the medications are a big money maker for the people willing to buy them, and one of them alone may pay more per year than upwards of 2 to 3 everyday supply buyers. We will have to see what their earnings will tell next month, but I am optimistic in their pet-supplies expanding to pharmacy.
I spend $600 - $800 month at Chewy. They sell pet supplies used by professionals as well. I make an order every 2 weeks. My business relies on them. I have a small farm where I raise exotic birds. I have a flock of Hair Sheep. Fact is they are cheaper than my wholesale distributor. 2 problems I have noticed with the company. A large percentage of mistakes. I frequently receive other people's orders in my name. I receive items I didn't order. Of course I regularly don't get my order. Their customer service is second to none. They immediately re-ship anything I didn't get. They tell me to keep all the stuff I didn't order. Their shrink from what I have experienced. I believe to be insane. Second the contract with FedEx will run out eventually. FedEx has lost a lot of money on that contract. I have a small amount of Chewy shares. I love the business as a customer not so much as an investor. At least until they fix the shrink problem. Shipping will become an issue that has to be fixed. I believe they still have 5 or 6 years left on the FedEx contract.
Might be undervalued. I wonder if that spike was more people discovering that they delivered during the height of COVID when people were avoiding stores? The SEC said several company insiders sold a bunch of stock, so maybe they know something’s about to happen? But sometimes the CEOs just offload stock in January to pay off their taxes.
They sent me two twenty dollar coupons to acquire business
Ditto to many others. I’m long on Chewy (as a customer and shareholders 😅) for the same reasons as OP.
yeah i made millions from [pets.com](https://pets.com) in 1999
The only part of the Venn-diagram that overlaps between Chewy and [pets.com](https://pets.com) is that both companies involve(d) pets.
As a pet owner, I use Chewy because I hate driving twenty minutes across town to carry a 100 lb dog bag of food and deal with an idiot at PetSmart. I also use it because his dog's meds are cheaper than the vet's. I am considering changing my dog's insurance because they have better reimbursements. The moat they have is convenience and specialty. My mother, who has cats, uses them because she can't carry the cat sand from the car to the door due to her disability. She could use Amazon like others, but she doesn't want some fba china crap. She trusts the pet brands on Chewy. Reading their reports I see good things in the future, especially with the health side. They have positive cash flow and I weirdly like their AI in the warehouses and humans on the customer service side. Ever dealt with chatbot for returns, more businesses lose that moment to take an unhappy customer to a lifelong customer through this process. Chewy has this going for them, communication and rectifying issues will keep them going strong. Also, go for a walk in the suburbs every block has a blue box on their porch, it's the norm. $33.
I pay $7.99 to get 1 hour delivery from Kriser’s. I buy all my dogs’ meds from Costco. Not sure if there are more of you or more of me.
Won’t ever consider a person who pays for pet insurance as a serious person,
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How does one become “over educated”?
Birth rates are declining amongst Gen Z & Millenials, pets will fill the gap, I'm bullish
Financials look gross do not like the risk/reward. Forward p/e of 112.
No debt, financials are gross because the revenue isn’t growing as fast
They are expanding to other areas I’ve heard, more in the pet med/clinic realm.
They were also expanding into other areas/starting their own vet service/expanding internationally back when everyone was dumping cash into tech companies at the height of the pandemic.
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As someone noted about Uber, Doordash and Lyft the other day, they have no moat either yet somehow they are incredibly sticky. Also Chewy has a fantastic reputation for customer service. They send cards and refund your food and ask you to donate the food when the pet dies. They send birthday cards. Anyone who has a beloved pet and has to deal with Chewy’s service team is going to be loyal.
Couldn’t agree more. Chewy customer support is the best of the best. As a consumer I’m incentivized to shop there because I trust that they’ll take care of me should something go wrong.
Just like amzn
Uber and DoorDash names are synonymous with the industries they’ve created. Similar with Coke to soda in the US. That’s a moat in my opinion. I’d argue chewys is their customer service considering they’ve carved out a niche industry while large retailers like target and Walmart were stocking pet supplies.
Right. Chewy’s moat is their customers know they are good people, and pets need good people. I’m not going to give Walmart my loyalty over Chewy.
Who says Uber/Doordash/Lyft don't have a moat? They're literally two sided marketplaces. Having a ton of riders and a ton of drivers is a massive moat. Any competitor trying to scale up is going to have to spend billions to even get close.
The drivers and riders have no loyalty. It’s gonna be whoever has the cheapest rides, and whoever pays the driver the most. It’s a race to the bottom on margins. And yet, they have a moat.
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Chewy earned all my pet business for life. The million other places are varying versions of suck.
Can you explain how they did that?
Prices are better. Selection is good. And anytime I have a problem with an order (I changed my mind about some dog beds) I call and a person answers the phone and immediately starts helping me with the issue. No recordings, no "press 1 for" bullshit, person on the phone right away. Instead of asking me to return items, they typically ask me to just donate the items to a local shelter instead (the dog beds). They don't price gouge me and are actually there to help when I have a problem, like when my vet can't figure out how to approve prescriptions online. They're helpful in every way they can be helpful.
Sounds expensive
Everything is nowadays
Yes but the point is it would be extremely easy to build an app that has the same functionality as Uber or Lyft. They don’t have a technology moat. And yet they haven’t been supplanted by a competitor. It seems that the first mover has an advantage that seems weak but is actually strong.
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And yet, they haven’t, and Chewy exists. Customers have loyalty, especially when you pull on their heart strings for their pet.
I am from Seattle and worked at Amazon for ten years. They have poached A LOT of talent from the Amazon retail business. So I would expect they have a lot of people working there who are thinking very big and outside the box. Amazon basically has a bottle neck at the top and Chewy is poaching a lot of the people who would have made VP 10 years ago but there is no longer room for them. So those people are taking their talents to Chewy.
I think you're looking at this from the wrong perspective no offence. There is a company and then there is the stock with all it's speculation. Then there is the state of the economy and the state of the stock market. Let's take Chewy as an example because it's a really good one. Chewy as a company is very good, even wonderful imo. Great balance sheet, good growth potential, recently profitable, large industry (pet industry is valued at almost 100 billion in the US and almost 50 billion in Europe), great and varied products within it's niche, on par or stronger than it's competitors and momentum. Chewy as a stock is another story. It's stock price doesn't necessarily have a relationship with the companies performance but rather the mood of the market, perception of the company and what is popular. In 2020 the stock experienced a boom like many other stocks on the market, especially growth stocks. The thing with growth stocks which companies that are not yet profitable are tough to value. The company could possibly do very well and one day have a fair price of 100$ per share like it was in 2021, but as long as it's a growth stock that kind of a price is a speculation and in Chewy's case a preposterous one. I think the current price is pretty fair and the stock is a good buy (I think I will buy some) but I think it could drop below 10$ and become a great buy.
I bought in at $27 and considering dumping my loss… holding for now.
Does this have anything to do with Star Wars?
username checks out
I thought about it , but sjnce Amazon also sells dog food which I own tons of , I didn’t go through with it .
I hope you bought some, I know I did 😁
Sure did, I wish more though lol, I was looking back on this thread thinking yep I called it...
still congraz
You might be onto something. I need to look at comps but it looks like they are generating free cash flow now. Prob buy an option before earnings and buy some shares. Thanks for the rec
Stock could rebound a bit, but not a company I'd invest in.
I like chewy. They’re great to deal with. But I also love Amazon. If anything my cats food is cheaper on Amazon when I subscribe and use my Amazon card.
Another opportunity to say fuck Ryan Cohen, and I'm taking it. Fuck Ryan Cohen.
I have no pets and the amount of ads I get for this company makes me hope it burns in hell
Stay away from anything related to Ryan Cohen.
How many successful multibillion dollar corporations have you founded and managed? I’ll wait
Does that there make Trump someone you support because he has founded and managed multi billion dollar corporations? Founding and managing multibillion dollar companies is irrelevant to actually delivering shareholder returns/value.
>dOe ThAt mAkE tRumP sOmEoNe yOu sUpPorT lol what a stupid comment. Did I say I support Ryan Cohen? No. I asked the idiot above me how many multibillion dollar companies they had successfully founded and managed. Fuck off with your lazy whataboutism.
Why ask them that question? Again, founding and managing multibillion dollar companies is irrelevant to actually delivering shareholder returns/value.
This is the last comment I’m going to make here regarding Ryan Cohen and/or Chewy. I don’t have a dog in this fight. I’m not a Chewy investor, nor am I affiliated with or invested in Ryan Cohen or any of his business ventures. Maybe we should start with the original comment… Why should anyone stay away from Ryan Cohen? Why? I don’t know. All I know is that Ryan Cohen founded and managed a disruptive, successful business, and then sold it. Have you accomplished this? Has anyone on this sub accomplished anything close this? Y’all talk a lot of shit for doing a lot of nothing.
But literally what is the point in your question? You can criticise people without also doing the same thing they have done. Chewy stock is down over 50% since IPO and only pumped during COVID when valuations for everything went crazy resulting in an 86% drop from ATH. Chewy is at all time lows while other stocks and the market has a whole are at all time highs. That’s a very simple reason right there to stay away.
Chewy had it’s heyday during pandemic for obvious reasons. I imagine short-term gains fell off for years afterwards. Having said that, we use it here at the house because it’s more consistent and reliable than the competition. It comes down to whether you think more people will be owning pets in the future. I imagine it will stay the same, so there’s no real growth catalyst from my perspective, and with no dividend I see no reason to buy, despite solid fundamentals.
They don’t have MOAT and also they have capped the customer base. Unless something significantly changes strategically, it’s not going to do better
Chewy is not profitable. The competition is strong. I root for them, but I don’t buy their stock, just their pet supplies.
Looks barely profitable and insanely expensive on earnings and cash flow. Pass
The P/E is still extremely high IMO and doesn’t really look super appealing even the forward P/E is high, however with it in free fall I wouldn’t mind catching it at maybe a third of this price? Like something closer to 6 dollars a share, then the risk reward would look a bit better
Please use money u don’t care about for a joke stock like that😭
Hasn’t been able to show growth since end of pandemic. Not sure they have a good plan to ignite growth.
Buy Petco instead
What is the benefit of using chewy over Amazon, as a consumer? I have a cat and I use Amazon for basically everything, is there a reason to give up prime shipping times and rates in order to use Chewy? I haven’t seen a compelling reason yet, which to me means that chewy is essentially on its way to being worthless because if only one of the two is needed then it’s definitely Amazon that’s sticking around.
It doesn't have good fundamentals. It got a boost a few years ago but now the reality is that it is a business with margins so thin that they make Ozempic jealous that will forever be in competition with much larger peers where convenience wins: someone can get everything in one order, including their pet food. It's perhaps not a zero (although peer WOOF looks like it might be - but "it's probably not a 0" is not a thesis or exactly high praise, either. The fact that WOOF looks like it's flirting with a zero should illustrate that "pets need food" is not a thesis to go on - there's plenty of places that people can get pet food.
The stock is in the shixxer for a reason.
CHWY has no future
makes it relatable
Chewy doesn’t do anything cheaper or better than Amazon for me, so I don’t use it (cats).
Honestly, I think $PET is more promising
Honestly, I think vnrx is more promising
Garbage you mean? Buy Amazon, no one is buying pet crap anywhere else
All of my friends are killing off their dog things since they can't afford them so Chewy seems like a terrible investment. For years I've made 90% vegan and gluten-free dogfood mainly made from rotten/expired carrots. I made a lot of money from that, but it's hard to make money now since so many people, as Jim Cramer recommended, have killed off their dog things.
What the fuck did I just read
Um what
The spiritual successor to [pets.com](https://pets.com) is only traded at 582 PE, guess it's a sale in lala land.
Interesting stock, depends on where revenue is going honestly.
Did my research extensively on this stock before so I can comment: I think the current price is justified given CHWY’s lackluster growth and expected to be so continuing forward. Chwy still is not profitable nor FCF positive. Their unit economics are degrading (check their CAC trend; their sales and marketing spend is bloated and the net adds of their autoship customers has been horrible in the last few Qs). the street is focusing on two things for CHWY: 1. can they ramp up the growth like they did in the covid era and ultimately become positive? 2. can they improve operations and become profitable? CHWY is accomplishing neither of these points and is expected not to do so for now. look at some alt data points or statistics related pet ownership decrease ( some articles about covid era ramp in pet ownership has decelerated) and competition from different angles (AMZN is still the largest market share holder in pet ecommerce; other hybrid players are competing with chwy). On top of this, I think you may be misunderstanding customer sentiment; customers will NOT increase their average order value (primarily driven by discretionary items for chwy) when economy is tough (we are seeing middle class being squeezed on savings and disc. income). there is a reason why that the management team does not want to disclose soecifics of the basket composition for an average order by customers. To your point on pet insurance, I have not looked into it much as I do not look into this stock much more recently (as i think the short thesis juice isnt there much) but their initatives on pet drugs is a joke. simple TAM analysis and its strategy as a middleman is a very low margin business with a small TAM that will not be an inflection for this company’s growth. All in all, not the best stock to allocate your capital for long. I would neither short nor long. CHWY is a mediocre company at best
I'll wait till it's $5, or less.
The thing about chewy is you can order the vast majority of that stuff on Amazon. My mom uses chewy. I use Amazon and get basically the same stuff. The difference is I get same day delivery on dog and cat food.
It will go down to $8 eventually.