Episode summary
Chewy Shares Slump as Executives Say Consumers Remain Pressured | Bloomberg Intelligence
Bloomberg Intelligence
· · 16 min · Hosts: Paul Sweeney, Scarlet Fu · Guests: Diana Rosero Pena, Michael Halen, Randall Williams
Summary
Chewy shares fell after executives signaled that consumer spending remains under pressure and that there is no meaningful recovery expected through the end of the year. The analyst said the quarter looked better on the surface than underneath, with growth helped by timing and acquisitions, while the underlying demand backdrop remained constrained. Chewy is still gaining share, but the discussion focused on a shift toward spending per pet rather than growth in pet ownership, with discretionary categories like treats and snacks more vulnerable than core food purchases. The company also narrowed its full-year outlook to net sales of $13.46 billion to $13.57 billion and an adjusted Ebitda margin of 6.7% to 6.8%.
The conversation also highlighted the broader pet market, which the analyst expects to expand to $645 billion globally by 2035, with U.S. spending reaching $250 billion. Cats were described as a faster-growing opportunity than dogs because they are cheaper to maintain and better suited to smaller living spaces.
Jersey Mike’s was presented as a strong restaurant story, with management guiding to 3% to 4% same-store sales growth in the second half, helped by higher marketing, digital advertising, and the return of Mike’s Hot Italian Sub. The episode closed with sports-business updates on NFL labor talks and the uncertainty around LIV Golf after its bankruptcy filing.
Key takeaways
- The analyst said Chewy’s demand is still restrained and expects discretionary pet spending to stay under pressure for the rest of 2026.
- Chewy narrowed full-year guidance to $13.46 billion to $13.57 billion in net sales and a 6.7% to 6.8% adjusted Ebitda margin.
- The analyst expects the pet market to grow to $645 billion globally by 2035, with U.S. spending at $250 billion.
- Jersey Mike’s is targeting 3% to 4% same-store sales growth in the second half, driven mainly by transactions and heavier marketing.
- The analyst said Jersey Mike’s 99% franchise mix helps insulate it from rising food and labor costs.
- The guest said LIV Golf’s future remains uncertain after bankruptcy protection and a funding pullback from Saudi Arabia’s Public Investment Fund.
Notable quotes
“they expect some challenges. They think that the industry is not necessarily growing”
“Growth is increasingly a spend per pet story, not a pet population story”
“They're looking there for three to 4% same source sales in the second half, driven mostly by transactions”
“They're 99% franchise, so they're not footing the bill for the higher food and labor costs”
How the episode opens
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All right, Carlos. Paul Swinny live here in our Bloomberg interactive broker studio streaming live on YouTube as well here. Uh earnings still earning season chewy for our pet lovers out there.
Um shares they fell as much as 10% the most since 2025 after the pet supply company forecast a sequential decline in gross margin for the third quarter due to a timing shift. Ooh, that's not good. Diana Rosidopena joins us here.
She's a consumer staples analyst for Bloomberg Intelligence. Uh what's going on with Chewy? cuz I see the Chewy boxes all over the place.
They're getting deliveries.
Yes. Um so for the quarter it was uh you know the headlines were uh strong but if you look under the hood uh a lot of it was timing and um you know acquisitions that fed into into the into the growth. Um you know shorter term they they they expect some challenges.
They think that the industry is not necessarily growing. um they are growing at a at a higher pace than than the overall industry and they are taking share but it it seems that they were a little bit downbeat from the call uh particularly with consumer um how restrained they are which is um you know something that we have seen.
So what does a pet consumer do when a pet consumer is constrained a little bit like like for us for humans maybe we'll trade down from a brand to a store kind of thing.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- chewy earnings
- consumer spending pressure
- pet retail outlook
- restaurant and foodservice earnings
- sports business and sponsorships
Companies and tickers mentioned
- CHWY
- Chewy Inc.
- Jersey Mike's
- LIV Golf
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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