Chewy vs. Petco Health and Wellness: E-commerce Growth vs. Omnichannel Stability
Key Points
Chewy currently looks stronger on revenue, consistently generating higher top-line totals and maintaining a general upward trajectory compared to its peer.
Over roughly the last eight quarters, Chewy has seen a slow but steady increase in quarter-over-quarter revenue, while Petco Health and Wellness has maintained a largely flat performance.
Investors should watch whether the revenue gap between the two companies continues to widen over time or if it begins to stabilize in the upcoming quarters.
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Chewy: Steady Revenue Expansion
Chewy (NYSE:CHWY) functions as an online retailer in the United States, selling food, supplies, and medications for companion animals.
While launching a consolidated private-label brand called Chewy Made, it reported a net income margin of approximately 1% for the quarter ended May 3, 2026.
Petco Health and Wellness: Flat Revenue Trend
Petco Health and Wellness (NASDAQ:WOOF) provides veterinary care, grooming, training services, and consumables through its digital platforms and physical retail locations.
While it reported a return to positive comparable-store sales growth, it posted a gross margin of approximately 38% for the quarter ended May 2, 2026.
Why Revenue Matters for Retail Investors
Revenue here refers to the data provider's standardized income-statement revenue line item, and it helps investors understand the total amount of money a business brings in before any operating expenses are deducted.
Quarterly Revenue for Chewy and Petco Health and Wellness
| Quarter (Period End) | Chewy Revenue | Petco Health and Wellness Revenue |
|---|---|---|
| Q3 2024 | $2.9 billion (period ended July 2024) | $1.5 billion (period ended Aug. 2024) |
| Q4 2024 | $2.9 billion (period ended Oct. 2024) | $1.5 billion (period ended Nov. 2024) |
| Q1 2025 | $3.2 billion (period ended Feb. 2025) | $1.6 billion (period ended Feb. 2025) |
| Q2 2025 | $3.1 billion (period ended May 2025) | $1.5 billion (period ended May 2025) |
| Q3 2025 | $3.1 billion (period ended Aug. 2025) | $1.5 billion (period ended Aug. 2025) |
| Q4 2025 | $3.1 billion (period ended Nov. 2025) | $1.5 billion (period ended Nov. 2025) |
| Q1 2026 | $3.3 billion (period ended Feb. 2026) | $1.5 billion (period ended Jan. 2026) |
| Q2 2026 | $3.3 billion (period ended May 2026) | $1.5 billion (period ended May 2026) |
Data source: Company filings.
Foolish Take
While neither of these petcare companies is a high-flying growth stock anymore, I’d argue that Chewy offers vastly superior growth potential. In contrast, Petco might be more interesting for deep-value investors looking for a turnaround. In their last quarter, Chewy grew sales by 8%, and Petco’s revenue remained flat.
This difference in sales growth is also pretty clearly reflected in each stock’s valuation. Chewy currently trades at 0.7 times sales and 19 times EBITDA, while Petco trades at 0.12 times sales and 10 times EBITDA, both deeply discounted. However, one thing investors should know is that Chewy has a slight net cash balance, whereas Petco has a massive $2.3 billion in debt versus its diminutive market cap of $750 million. This makes Petco a much more vulnerable company compared to Chewy and helps explain its deeply discounted valuation.
Ultimately, I much prefer Chewy for the long term thanks to its better balance sheet, steady growth prospects, leadership position in its e-commerce niche, and loyal customers. Furthermore, Chewy generates 84% of its sales from Autoship repurchases (such as dog food), creating a massive recurring revenue base month after month. Lastly, Chewy has several developments in the works that should have driven its profit margins higher, including:
- Chewy Vet Care clinics
- private label goods
- health and wellness products
- advertising
- Higher efficiencies from Autoship as it keeps expanding
I would only be interested in buying Chewy today and will likely continue doing so for myself and my daughter while it trades near 52-week lows, despite reporting solid operational results.
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Josh Kohn-Lindquist has positions in Chewy. The Motley Fool has positions in and recommends Chewy. The Motley Fool has a disclosure policy.
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