Chewy’s (NYSE: CHWY) stock price dipped following the FQ3 2025 earnings report, which opened a buy-the-dip opportunity. The results were mixed relative to the analysts' expectations but aligned with pet industry trends and an outlook for sustained growth. The trends include another quarter of declining active users compared to the previous year but suggest active users will revert to growth soon and maintain growth over the next few years.
The primary cause for user count declines is post-pandemic normalization, which has just about run its course. The decline in Q3 is only 0.5% and is offset by other metrics that show leverage building for when macroeconomic headwinds ease. That is expected in 2025 as interest rates fall and Trump’s economic policies begin to take effect. Critical details within the report include the sequential improvement in user count, increasing revenue per user, and the high 77% recurring revenue rate. Autoship metrics indicate that the recurring revenue is visible and growing, providing a solid foundation from which growth can accelerate for the eCommerce retailer when the user count metrics improve and macroeconomic headwinds ease.
