Chewy Says Pet Owners Want Convenient Delivery of Essential Items

Pet owners are paring back on nonessentials but boosting their purchases of the basics.

Online pet product supplier Chewy reported Thursday (Dec. 8) that its 14.5% year-over-year growth in net sales during the quarter ended Oct. 30 was driven by non-discretionary products like food and healthcare. At the same time, it saw a 5% decline in discretionary hard goods like beds, toys, crates and leashes.

“The operating environment remains dynamic and evolving,” Chewy CEO Sumit Singh said Thursday during the company’s quarterly earnings call. “What hasn’t changed is how much pet parents value the enduring companionship of their pets, and it is this emotional bond that sustains the pet category through all phases of the economic cycle.”

Non-discretionary categories made up 83% of Chewy’s net sales during the quarter and were also the primary drivers of growth. Singh said this reflects healthy demand and improved in-stock levels.

The company continued to build out its pet health offerings during the quarter. It expanded its suite of insurance and wellness offerings called CarePlus with offerings provided by Lemonade, diversified its range of price points and coverage options, and launched a private brand of non-prescription supplements called Vibeful.

“Given the increased consumer focus on wellness and the ongoing trend towards pet humanization, we believe this launch gives us another opportunity to strengthen our connection with customers and to drive top and bottom-line results,” Singh said.

Singh said the company’s Autoship subscription program also contributed to the rise in net sales. Autoship provides customers with a convenient and flexible automatic reordering and delivery that makes it easy to meet their recurring needs, the company said in a shareholder letter.

“Our top line results were anchored by the predictable nature of our Autoship customer sales,” Singh said, adding that these sales grew nearly 19% to 73.5% of net sales.

“Our results are a clear indication of the resiliency of the pet category and how Chewy’s compelling value proposition of low prices, personalized service and delivery convenience across a broad selection of products continues to resonate with our customers,” Singh said.

For all PYMNTS retail coverage, subscribe to the daily Retail Newsletter.