What happened
Shares of Chewy (CHWY 0.12%) are falling 3.9% as of 10:32 a.m. ET on Friday on no company-specific news and despite the major market indexes all pretty much treading water so far.
The online pet products company has seen its shares rise 22% this year, and they have doubled from the lows they hit last May as it continues to add more new customers who continue to spend as much on their pets as Chewy's older ones. Even so, it ended 2022 with 20.5 million active customers, down from 20.7 million the year before.
Image source: Getty Images.
So what
Still, it's an environment ripe for a business like Chewy's. According to Packaged Facts, over two-thirds of U.S. households are tightening their own belts as inflation and rising interest rates take a toll on household finances, but it found only 15% are reducing what they spend on their pets.
Moreover, the American Pet Product Association says food is the No. 1 item pet owners spend money on, some 40% of the $123 billion they lavished on their fur babies in 2021.
However, the number of U.S. households owning a pet has declined since the pandemic started to 52% versus 54% in 2018.
Now what
While the economic environment could prove challenging, the long-term growth prospects for Chewy still seem to point higher. It isn't surprising for a stock that's been rallying as Chewy has for shares to take a breather before resuming their climb.
