Chewy+ subscription strength helps extend the streak of growing 'pegged' customers
By Tomi Kilgore
Retention held up better than expected, lifting key Autoship metrics after Chewy raised the Chewy+ annual fee from $49 to $79.
Chewy anticipates Autoship sales will keep rising as a share of total revenue, propelled by the Chewy+ program's growth.
Chewy reported fiscal third-quarter results that topped expectations, with more customers continuing their Chewy+ subscriptions despite the substantial price increase. This trend supported ongoing gains in a crucial metric the company watches closely because it helps keep customers anchored with Chewy rather than drifting to competitors.
In the quarter, Chewy’s Autoship customer sales — orders set to automatically recur with a discount — climbed 13.6% year over year to $2.64 billion, ahead of the FactSet consensus of $2.59 billion.
Autoship’s share of overall sales rose to 83.9% from 83% in the prior quarter and 80% a year ago, marking the seventh consecutive quarter of sequential growth.
Autoship sales are valued for their predictability, enabling Chewy to plan more efficiently, reduce costs, and improve profitability, Chief Executive Sumit Singh said on the earnings call transcript via AlphaSense. The program also bolsters retention among Chewy’s most loyal customers.
"Autoship is a repeatable merchandise program with high reliability in planning, delivery, and customer satisfaction," an executive noted during the discussion.
With more than 80% of members now pegged to Autoship, the company believes the model will scale further and operate more efficiently over time.
Meanwhile, Chewy’s stock fluctuated during the session but finished higher by 1.5%.
Beyond Autoship growth, Singh highlighted that the Chewy+ membership program continues to outperform expectations by driving higher order frequency, broader engagement across categories, and greater adoption of the mobile app. Chewy+ is also contributing to stronger Autoship participation.
Chewy launched Chewy+ at an introductory annual price of $49 with a 30-day free trial, then raised the price to $79 per year at the end of October. While some subscriber churn was anticipated after the price increase, early data indicates ongoing growth and stronger-than-expected conversion from free to paid memberships.
For the quarter ended Nov. 2, total sales rose 8.3% year over year to $3.12 billion, just above the FactSet consensus of $3.10 billion.
Net income rose to $59 million from $4.2 million, and earnings per share reached 14 cents, beating the consensus of 12 cents.
If there was a downside, the company projects fourth-quarter revenue of $3.24 billion to $3.26 billion, roughly in line with analyst expectations of $3.261 billion.
Through 2025, the stock has gained about 3.7%, while the S&P 500 advanced around 16.3%.
-Tomi Kilgore
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12-10-25 1924ET
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