Chewy: Margin Expansion Offsets Sales Choppiness At A Great Valuation

Chewy remains a 'Buy' despite a ~40% YTD decline and a guidance cut, as I view challenges as cyclical, not structural.

CHWY lowered FY26 sales outlook to $13.40–$13.55 billion, citing macro headwinds and consumer trade-down to lower-priced pet products.

I see ongoing improvements in margins, customer net additions, and engagement, supporting long-term growth and share gains.

While near-term volatility is expected, I am willing to accept choppiness for an attractive entry point at the current valuation.

As we move throughout the second half of 2026, my focus remains on diversifying my portfolio beyond the large-cap AI and semiconductor stocks that have driven much of the market's gains in the first half.

In my view, investors will start to broaden This article was written by Gary Alexander 34.16K Followers Follow With combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today.

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of CHWY either through stock ownership, options, or other derivatives.

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