Chewy Says Autoship and Paid Membership Programs Drive Sales Growth

Growth in Chewy’s Autoship subscription program and Chewy+ paid membership program helped drive an 8.6% year-over-year increase in net sales in the second quarter, exceeding the high end of the company’s guidance range.

The Autoship program’s net sales increased by about 15% during the quarter and accounted for 83% of the retailer’s total net sales, the online pet product retailer said in a Wednesday (Sept. 10) earnings release.

Over the last 12 months, Chewy’s total net sales grew 9.2% year over year while its Autoship customer sales grew 14.9%, according to a presentation released Wednesday.

The Chewy+ program exceeded the company’s expectations, CEO Sumit Singh said Wednesday during the company’s quarterly earnings call. It accounted for 3% of Chewy’s total monthly sales in July and is expected to make up a mid-single-digit share of its net sales by the end of the year.

The program’s gain in share of total sales is important because compared to non-members, Chewy+ members have greater net sales per active customer (NSPAC), higher profit per customer, higher buying frequency, more products per order, higher Autoship adoption and greater mobile app usage, Singh said.

“All of this is leading to both higher as well as accelerated NSPAC curves for Chewy+ customers compared to non-members, which in turn is contributing positively to Chewy’s net sales flywheel,” Singh said during the call.

Chewy launched its paid membership program in summer 2024. Today, Chewy+ offers, for $49 a year, free shipping with no order minimums, 5% rewards on every order and exclusive offers like discounts, double rewards and freebies, according to the company’s website.

“We see this program in line with an Amazon Prime or Costco membership, or Walmart+, with similar benefits and similar returns,” Singh said during the call.

Chewy’s other growing program, Autoship, allows customers to set the frequency of deliveries, save 5% on eligible items, easily add one-time items, and get priority access to to popular items and essentials, according to its website.

Autoship and Chewy+ are helping to boost the company’s NSPAC, which has been growing at 4.5% and is expected to increase in the range of 4% to 5% in the second half, Singh said during the call.

“This is through stronger Autoship, stronger product mix and programs like Chewy+ that are driving consolidation, so it makes a lot of sense for us to lean in and continue to capitalize on the growth that we’re seeing,” Singh said.