Chewy Is Down 25% This Year. Investors Should Be Eager to Buy.
Key Points
Chewy recently announced its plans to acquire Modern Animal, a tech-forward veterinary platform.
The pet retailer's autoship program was responsible for 84% of the company's net sales in 2025.
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Chewy's (NYSE: CHWY) stock has been chewed up by 2026 so far. The pet supply company saw shares tumble 25% since the start of January and 35% over the past 12 months. Investors are left wondering if Chewy is all bark and no bite.
On the contrary, this prolonged downturn is actually a great opportunity for long-term investors to buy shares at a reasonable price. Chewy is focusing on expanding its private-label offerings and health services to increase its margins and improve profitability.
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Chewy has opened 18 veterinary clinics, operates the top pet pharmacy in the United States, and recently announced plans to acquire Modern Animal, a tech-forward veterinary platform. This buyout will expand its footprint to 47 clinics. These services are high-margin offerings that keep customers coming back and buying even more.
Image source: Getty Images.
Chewy's autoship program is still flying high. Through fiscal year 2025, 84% of Chewy's net sales came from its autoship program. This recurring and predictable revenue provides a substantial competitive advantage for the pet-focused e-commerce business.
Chewy has faced tough macroeconomic headwinds recently, but its sales and margins are improving, and the business is durable. As it continues to grow its private label and healthcare services, Chewy will claw its way back.
The stock is currently trading near its 52-week low, making this moment an appealing entry point.
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Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chewy. The Motley Fool has a disclosure policy.
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