Chewy (CHWY) Shares Surge 2.84% on Three-Day Rally to 2025 High Ahead of Earnings and Market Optimism

Chewy (CHWY) shares climbed 2.84% on Wednesday, marking a three-day winning streak with a cumulative gain of 7.33%. The stock hit its highest level since September 2025, with an intraday surge of 3.01%, signaling renewed investor confidence in the online pet care retailer.

Chewy’s recent rally aligns with its dominant position in the U.S. digital pet market, where it holds an estimated 33% share. Analysts highlight the growing shift to online pet care, driven by convenience and recurring demand for essentials like food and medications. Over 80% of Chewy’s revenue comes from subscription-based Autoship programs, creating a stable, predictable cash flow structure. This defensive business model insulates the company from economic volatility, particularly as non-discretionary spending accounts for 85% of its sales.

Upcoming earnings on September 10 could act as a catalyst for further momentum. Analysts project Q2 adjusted EPS of $1.41 and revenue of $3.08 billion, with expectations that Chewy may exceed its sales guidance of $3.06 billion–$3.09 billion. Strong customer growth—over 20 million active users—supports optimism, with sales per customer rising to $588.68 in Q2. Enhanced marketing and loyalty strategies are driving retention, while consumables revenue is projected to grow 6.3% year-over-year to $2.14 billion.

The stock’s performance reflects broader market optimism, outperforming the S&P 500 by 12 percentage points over the past month. JPMorgan’s Overweight rating and a $47 price target, based on a 24x 2026E EBITDA multiple, underscore confidence in Chewy’s long-term potential. However, investors remain focused on key metrics like customer acquisition costs and operating margins ahead of the earnings report. The company’s ability to maintain operational efficiency and adapt to trends such as premium pet products and telehealth services will be critical to sustaining its competitive edge.

With the online pet care sector expanding and Chewy’s recurring revenue model positioned to benefit, the stock’s recent strength suggests a focus on both near-term execution and long-term growth. The upcoming earnings release will serve as a pivotal test of the company’s ability to meet expectations and reinforce its role as a leader in a rapidly evolving market.