Chewy vs. Dick's Sporting Goods: Do Pets or Sports Power Stocks More in 2026?

Retail investors often weigh digital convenience against physical dominance when building a portfolio. Choosing between Chewy Inc. (NYSE:CHWY) and Dick's Sporting Goods Inc. (NYSE:DKS) requires understanding how each navigates the shifting consumer landscape.

Chewy specializes in the high-frequency pet category, leveraging its digital-first model and subscription services to build customer loyalty. Conversely, Dick's Sporting Goods operates a massive physical footprint and recently expanded into global sneaker culture. Both companies compete for discretionary spending, though their operational models differ significantly for investors looking at 2026.

The case for Chewy Inc.

Chewy sells pet food, supplies, and medications primarily through its e-commerce platform, competing for dominance among retail stocks. It serves pet parents across the U.S. and Canada, offering nearly 190,000 products from roughly 4,000 different brands. Its Autoship subscription program is a core strategy, providing high revenue visibility by automating recurring customer orders.

In FY 2025, revenue reached about $12.6 billion, representing a growth rate of approximately 6.2% compared to the prior year. The company reported a net income of about $222.8 million, down from $392.7 million in FY 2024. This change in net margin occurred despite a steady increase in its total active customer base to 21.7 million.

As of its February 2026 balance sheet, the debt-to-equity ratio is 1.0x, meaning total debt is equal to shareholder equity. Its current ratio, which measures the ability to pay short-term obligations with short-term assets, is 0.9x. Free cash flow for the year was approximately $562.4 million, though stock-based compensation represented roughly 43.1% of operating cash flow, which inflates reported cash generation since stock-based compensation is a non-cash expense added back in the cash flow statement.

The case for Dick's Sporting Goods

Dick's Sporting Goods operates a global retail network serving athletes and sneaker enthusiasts through various store banners. Following its 2025 acquisition of Foot Locker, the company now manages over 3,100 store locations across North America, Europe, and Asia. Its loyalty program, ScoreCard Rewards, includes roughly 30 million members who provide a deep well of customer data.

In FY 2025, revenue reached approximately $17.2 billion, which was a significant 28.1% increase over the previous fiscal year. Net income for the period was about $849.2 million, translating to a net margin of 4.9%. While total revenue grew sharply due to the Foot Locker integration, the net margin declined from the 8.7% recorded in the prior year.

As of its January 2026 balance sheet, the company carries a debt-to-equity ratio of 1.4x, indicating that total debt levels are higher than shareholder equity. Its current ratio is 1.5x, suggesting a comfortable cushion for meeting its immediate financial commitments. Free cash flow for FY 2025 was roughly $400.2 million, providing the capital necessary to continue its global store expansion.

Risk profile comparison

Chewy faces intense competition from online and traditional pet retailers, which can increase the cost of finding new customers. The business relies heavily on third-party providers like Amazon.com Inc. (NASDAQ:AMZN) for data center services. It also manages risks related to data privacy regulations and shifting consumer spending habits that could impact its veterinary and insurance services.

Dick's Sporting Goods is currently navigating the complex integration of its new business lines, which includes risks of failing to reach expected cost savings. The company also deals with high revenue concentration from Nike Inc. (NYSE:NKE), its largest vendor. Additionally, it faces ongoing securities class action lawsuits related to its public disclosures and inventory positions.

Valuation comparison

Dick's Sporting Goods trades at a significantly lower multiple relative to its future earnings estimates than Chewy, though both trade at similar levels relative to sales.

Valuation metrics include those sourced from Financial Modeling Prep (FMP) and may differ from those of other data providers.

The P/S ratio, which measures market value against sales over the past twelve months, shows that investors are paying a similar premium for each dollar of revenue at both firms. However, the Forward P/E suggests that the market expects higher growth or assigns a higher premium to the pet retailer compared to the sporting goods giant.

Which stock would I buy in 2026?

Dick's is winning in the hotly competitive sporting goods sector. The business had about 7% market share before the pandemic and ended its fiscal 2026 with 9% share, according to stock research firm Argus. That's very good growth considering the sporting goods market sees heavyweights Walmart Inc. (NASDAQ:WMT), Amazon, and others heavily into selling the same category.

The company believes footwear is the growth engine for the company as a whole, hence its enthusiasm for the Foot Locker acquisition. Foot Locker will help Dick's to strengthen relationships with brands like Nike and hopefully lead to access to higher-profile product launches. Foot Locker also gives Dick's a footprint in cities, where it is difficult to open a big-box store.

Thanks to the Foot Locker buy and improved merchandising, Dick's should add $5 billion in sales this fiscal year, bringing total sales to more than $22 billion, and see net income exceed $1 billion.

Chewy, meanwhile, is establishing a steady growth pattern. In a recently reported quarter, management noted that its Autoship program grew faster than overall sales, implying that many customers' standing orders will continue to provide a solid base for the company. The company also believes that in the long run, veterinarian and general pet health services are a huge untapped market for Chewy. The business recently closed on the acquisition of Modern Animal, which delivers high profitability per location and is a strong complement to Chewy's existing business.

For fiscal 2026, sales are seen rising 7% to $13.5 billion, with net income up nearly 50% to $333 million, according to consensus analyst estimates.

However, Chewy likely doesn't have a great competitive moat against brick-and-mortar competitors like PetSmart and Petco Health and Wellness Co Inc. (NASDAQ:WOOF).

American consumers have shown they will spend up to take care of their pets. But Chewy's low net income relative to its sales shows how competitive the pet supplies market is. Dick's appears to have growth prospects in youth sports with its Gamechanger app and simply has better net income and cheaper shares, on a forward P/E basis, than Chewy today. That makes Dick's Sporting Goods the pick in 2026.

Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Chewy, Nike, and Walmart. The Motley Fool has a disclosure policy.