Theme this week
Chewy added debt as capital spending rose and Petco’s product sales fell. Both reports leave clinic earnings unclear. Recalls, screwworm supply rules and kidney care support can add staff work and costs. Check recalled stock now, and use confirmed orders, clinic results and care costs to guide this month’s spending.
Executive takeaways
- Forecast cash left after costs and loan payments before approving expansion spending. Chewy’s quarterly capital spending rose 71.1% year on year. Its loan principal reached US$600 million at August 2. Separate veterinary earnings are unreported. 1, 2
- Block sale, use and shipment of recalled Fi lots today if the business stocks, supplies or uses the supplements. Fi recalled two dog supplement lots that may contain Salmonella. Dates for fresh stock are unclear. 3
- Check each product’s supply rules before its first sale for New World screwworm use. Capstar and Felix’s Nitenpyram Tablets now have emergency authorization for prevention in eligible dogs and cats. Duties vary by product and seller. 4, 5, 6
- Measure staff time for kidney care follow-up this month before adding support hours. International Cat Care’s updated guide covers cats with other illnesses and owners who need more help. 7
- Show product sales and service revenue on separate lines in the next budget. Petco’s product sales fell 0.7%, while “services and other” revenue rose 3.6%. Growth in vet care alone is unknown. 8, 9, 10
Signals
1. Chewy adds debt as acquisition and capital spending rise
OBSERVED
Chewy released its second-quarter results on September 9, 2026. The quarter covered 13 weeks ended August 2, 2026. 1
| US$ million | 13 weeks ended August 2, 2026 | 13 weeks ended August 3, 2025 | Year-on-year change |
|---|---|---|---|
| Net sales | 3,330.2 | 3,104.2 | 7.3% |
| Income from operations | 92.0 | 69.7 | 32.0% |
| Cash from operations | 137.4 | 133.9 | 2.6% |
| Capital spending | 47.9 | 28.0 | 71.1% |
| Free cash flow | 89.5 | 105.9 | −15.5% |
| Sales to Autoship customers | 2,817.2 | 2,576.9 | 9.3% |
Source: Chewy release and quarterly filing. PETMETRIX calculated changes from the reported figures. 1, 2
Chewy reported sales growth of 5.7% excluding SmartPak and Modern Animal. Gross margin remained 30.4%. 1
Free cash flow is cash from operations less capital spending. First-half free cash flow rose 3.7% to US$160.3 million. 1, 2
During the first 26 weeks, Chewy paid US$552.8 million for acquisitions, net of acquired cash, and repurchased US$400.0 million of shares. It also spent US$85.6 million on capital projects. 2
On August 2, loan principal was US$600.0 million, compared with none at February 1. Cash and cash equivalents fell from US$860.1 million to US$611.0 million over that period. 2
Chewy bought Modern Animal on May 21, 2026. Its filing links first-half capital spending to fulfillment centers, veterinary clinics and future pharmacy facilities. It gives no spending split between these categories. Neither the release nor the filing reports separate veterinary sales, profit or clinic counts. 1, 2
Sales to Autoship customers reached 84.6% of net sales, compared with 83.0% a year earlier. Chewy counts customers with an Autoship order shipped during the preceding 364 days. The measure includes their purchases outside Autoship. 2
VIEWPOINT
Chewy is spending more on acquisitions and facilities while adding debt. New loans add interest costs and future repayments. Share buybacks also use cash that could fund facilities or stock. Cash from operations helps fund this spending, but returns depend on what the acquired businesses and new facilities earn after their costs.
The spending could create new orders for suppliers, but Chewy has not shown where each investment dollar went. Buying stock or approving account spending from company-wide growth alone could tie up cash before orders arrive. Confirmed product orders, delivery dates and service terms help suppliers plan stock and support costs.
Ownership of Modern Animal could give Chewy more chances to win both care visits and related purchases. Nearby clinics need local evidence of services, prices and client transfers to judge that risk. For clinic buyers, Chewy’s combined results also leave veterinary earnings unclear. A purchase forecast therefore needs the clinic’s own visits, fees and costs.
CONFIDENCE
High — the filings support the sales, spending and debt figures. Profit from veterinary care and effects on nearby clinics are unclear.
ACTIONS
Independent veterinary practices
- Compare nearby Modern Animal fees and booking times this month. Use the clinic’s current fees and schedule.
- Log reasons clients give for moving to Modern Animal this month.
Corporate veterinary groups and clinic consolidators
- Have site leads report confirmed client moves to Modern Animal this month. Use the same list of reasons.
- Forecast cash left after costs and loan payments before the next clinic purchase. Use the clinic’s own visits and fees.
Distributors, e-retail and home delivery providers
- Check sites and ship dates on Chewy orders before holding extra stock this month.
- Cost any extra Chewy shipments before agreeing to new terms. Include freight charges and staff time.
Manufacturers and commercial operators
- Split Chewy orders by business in next quarter’s production plan. Give SmartPak and Modern Animal their own lines.
- Base stock and training budgets for new Chewy sites on confirmed orders before the next account review.
2. Fi recall requires checks of two supplement lots
OBSERVED
Fi announced a recall on September 3, 2026. The recall covers two dog supplement lots that may contain Salmonella. The US Food and Drug Administration (FDA) posted the company notice on September 8, 2026. 3
| Product | Pack size | Recalled lot | Barcode number |
|---|---|---|---|
| Fi Calming supplement for Dogs | 180 g | 26118 | 8 50064 80011 1 |
| Fi 8-in-1 Formula supplement for Dogs | 180 g | 26159 | 8 50055 11168 4 |
Source: Fi recall notice. 3
Fi says the products reached buyers through direct sales, Amazon and Chewy. It says its manufacturer paused production during the investigation. Fi recommends buyers of affected lots to stop use, tightly seal the containers and discard them. 3
VIEWPOINT
Lot records help sellers find affected stock and contact the right buyers. Gaps can force wider holds while staff check which packs the recall covers. Valid orders could then face delays and extra handling costs.
The production pause could delay fresh stock after sellers remove recalled packs. Sellers who promise replacements before suppliers confirm stock may face canceled orders and repeated calls. Clinics may also spend staff time helping clients check products bought elsewhere.
CONFIDENCE
High — Fi’s FDA-hosted notice identifies the lots. Packs still with buyers and dates for fresh stock are unclear.
ACTIONS
Stock and shipment actions apply only to businesses that stocked or supplied the described Fi supplements.
Independent veterinary practices
- Check lot numbers against Fi’s recall notice when clients report using either supplement.
- Send Fi’s recall instructions today to clients known to have affected lots.
Corporate veterinary groups and clinic consolidators
- Give clinic teams the recalled lot numbers and Fi’s recall instructions today.
- Have site leads send Fi’s recall instructions today to clients known to have affected lots.
Distributors, e-retail and home delivery providers
- Block recalled lots from all new and pending shipments now.
- Send Fi’s recall instructions to buyers listed in affected order records today.
Manufacturers and commercial operators
- Reconcile shipments of affected lots this week. Use customers’ stock, sales and disposal records.
- Confirm stock and ship dates before promising replacements this week. Use suppliers’ confirmed stock available for sale.
3. FDA adds screwworm prevention uses with separate supply rules
OBSERVED
FDA gave Capstar emergency use authorization on September 3, 2026. It revised the authorization for Felix Pharmaceuticals’ Nitenpyram Tablets. 4
Both now cover prevention and treatment of New World screwworm infestations in eligible dogs and cats. These animals must weigh at least two pounds and be at least four weeks old. Both products can be sold without a prescription. FDA described most US dogs and cats as having low exposure risk on that date. 4
Each letter sets rules for storage, records and promotion. Both require the authorized fact sheet to be available to all users. A separately branded version needs explicit coverage in the matching letter. 5, 6
The generic letter defines which sellers count as distributors. It excludes clinics and vets supplying only vets and end users at their own facility. Capstar’s definition includes all firms between its sponsor and the end user. The sponsor holds the authorization. 5, 6
Promotional material must include the fact sheet, applicable approved labeling and required emergency-use statements. Both letters require sponsors and authorized distributors to submit this material to FDA when first published or broadcast. 5, 6
VIEWPOINT
Prevention use may create demand beyond treating pets that already have screwworm. Low exposure in much of the country could still limit sales in the next few months. Stock spread evenly across accounts could sit unused while some locations need more supplies.
One procedure for both products could miss duties that depend on the seller’s role. Staff also need to check product information and advertising. Gaps in required records or product information could delay orders and add work before sales cover those costs.
CONFIDENCE
High — FDA’s letters set the uses and supply rules. Local demand and sales are unclear.
ACTIONS
Independent veterinary practices
- Add the chosen product’s rules to the clinic checklist before its first screwworm order. Include storage and any required records.
- Make the matching FDA fact sheet available in client handouts before the first sale for screwworm use.
Corporate veterinary groups and clinic consolidators
- Have the operations lead approve storage and record checklists for each product before a site’s first screwworm order.
- Test each site’s client access to the matching FDA fact sheet before its first sale for screwworm use.
Distributors, e-retail and home delivery providers
- Check that FDA’s letter covers the exact product before adding screwworm claims to its page.
- Send each downstream distributor the matching FDA letter and fact sheet before its next screwworm shipment.
Manufacturers and commercial operators
- Check screwworm sales material before use. Include required statements, fact sheets and approved labeling.
- Submit screwworm promotional material to FDA with Form FDA 2301 when first published or broadcast.
4. iCatCare adds kidney disease guidance on other illnesses
OBSERVED
International Cat Care (iCatCare) Veterinary Society published updated guidance on chronic kidney disease in cats on September 3, 2026. It adds sections on other illnesses, anesthesia and pain relief. 7
The guide covers food needs that can conflict when a cat has several illnesses. It notes that the nutrient content of a diet can change. 7
It also describes team support for owners who struggle with medicines, follow-up checks or costs. The advice draws on published research and expert judgment. 7
VIEWPOINT
Owners of cats with several illnesses may need more help with food and medicine plans. Standard handouts may leave owners with conflicting advice or questions about cost. Answers could help owners complete the agreed care plan. Repeat calls may also use staff time needed for appointments.
The return on owner support depends on the support needed and the planned visits and purchases completed. A clinic spending more time per case may face higher costs even when sales rise. Patient needs could explain some differences across sites. Comparing similar cases could help groups find avoidable repeat work.
Diet choices may depend on nutrient content as well as price and stock. Missing or outdated product details could delay a clinic’s choice and the order. Suppliers with clear, current details may spend less time answering those queries.
CONFIDENCE
Moderate — the published guideline combines research and expert judgement. Effects on staff time, completed care and sales are unmeasured.
ACTIONS
Independent veterinary practices
- Have the lead vet update kidney-care handouts this month for cats with other illnesses.
- Record staff minutes per kidney-care follow-up this month before adding support hours.
Corporate veterinary groups and clinic consolidators
- Have the medical lead approve kidney care follow-up roles within 30 days. Name the questions that need a vet.
- Compare minutes per kidney follow-up across sites before next month’s budget. Group cats by disease stage and other illnesses.
Distributors, e-retail and home delivery providers
- Check kidney diet listings against the maker’s latest nutrient sheet this month. Match product versions and units.
- Get the treating vet’s approval before filling a clinic order with a different kidney diet.
Manufacturers and commercial operators
- Give clinics current nutrient facts for each kidney diet before training. Include the date, product version and units used.
- Send product claims based on the guideline for vet review before the next campaign. Include the supporting evidence.
5. Petco product sales fall as services and other revenue rises
OBSERVED
Petco released its results on September 2, 2026. Net sales rose 0.05% year on year to US$1.489 billion. The quarter covered 13 weeks ended August 1, 2026. 8
Product sales fell 0.7%, calculated by PETMETRIX from the filed figures. “Services and other” revenue rose 3.6%. Sales of consumables rose 0.2%. Sales of supplies and companion animals fell 2.0%. 9
Product gross profit rose 0.9%. PETMETRIX compared product revenue less product cost of sales in both quarters. Petco also reported a US$6.8 million net benefit from tariff refunds. It gave no split of that benefit between products and services. 8, 9
Petco linked a sales disruption to higher use of membership points than expected after its program relaunch. The company gave no figure for the effect on product sales. 8
“Services and other” includes veterinary care, grooming, training and other services. 10 The quarterly disclosures give no separate figures for veterinary sales or growth. 8, 9
VIEWPOINT
Petco’s total sales give suppliers a weak guide to future product orders and service competitors a poor planning benchmark. Growth in services can keep total sales steady while demand for products changes. Revenue also reflects prices and discounts, leaving the number of units shoppers bought unknown. Assuming the membership effect will reverse could lead suppliers to buy stock that later needs discounts.
Product profit and sales can move in different directions. A tariff refund could also lift profit without improving the margin on future orders. A clinic budget based on total sales growth could commit cash to the wrong expense. Stock needs depend on units dispensed; staffing needs depend on visits and the work involved.
Petco’s combined service growth gives little guidance on what a clinic could earn. Applying that rate to a clinic model could justify a purchase price the clinic’s own earnings cannot support. Separate forecasts for visits, fees and costs would show whether expected profit depends on more appointments, higher prices or lower spending.
CONFIDENCE
High — Petco filings support the figures. Units sold, veterinary growth and the split of the tariff benefit are unknown.
ACTIONS
Independent veterinary practices
- Check next quarter’s stock and staffing budgets. Flag increases based only on total revenue growth.
- Set next month’s medicine and diet orders using last month’s units dispensed, usable and incoming stock, and supplier lead times.
Corporate veterinary groups and clinic consolidators
- Standardize monthly care and product reports across clinics. Use consistent sales and cost definitions before next quarter’s budget.
- Test profit before the next clinic purchase. Hold visits at the latest 12-month total, using proposed fees and costs.
Distributors, e-retail and home delivery providers
- Set next month’s stock purchases from customer orders, usable stock and stock due. Include supplier lead times.
- Match shipments for Petco to confirmed orders each week before reserving more stock.
Manufacturers and commercial operators
- Rebuild next quarter’s Petco forecast by product line. Use units sold, prices and planned offers.
- Calculate profit on the next Petco offer before approval. Include product cost, discounts, retailer charges and shipping.
Methodology and governance
This PULSE Edition covers developments posted or acted on from September 2 through September 9, 2026, using US Eastern Time.
Observed statements are anchored to public sources and attributed subscriber reports cited below. Viewpoints are PETMETRIX assessments that interpret commercial implications for operators. Early watch items are early hypotheses. They are not yet strong enough for a full Signal, and they include what would confirm or rule out the pattern.
PETMETRIX PULSE commercial intelligence is provided for informational use and to support lawful, independent business decisions. It is not legal, clinical, reimbursement, accounting, or financial advice. Route legal, clinical, reimbursement, accounting, and financial decisions to qualified advisers. Respect for the veterinary-client-patient relationship is mandatory.
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Glossary
Autoship: Automatic recurring delivery of pet products or medicines on a set schedule.
Autoship customer sales (Chewy): Chewy’s net sales to customers who had an Autoship order shipped during the preceding 364 days, including their purchases outside Autoship.
Chronic kidney disease: Long-term loss of kidney function.
Consumables: Products that are used up and regularly replaced, such as pet food and treats.
Cost of sales: The cost of buying or producing the goods, or providing the services, sold during a stated period.
Emergency-use authorization: FDA authorization that allows a product to be used for a specific emergency need under stated conditions.
Gross profit: Net sales minus cost of sales, before other operating expenses, interest and income taxes.
Lot number: A manufacturer code used to identify a specific batch or production run, often for inventory checks and recalls.
Net sales: Sales revenue after deductions for returns, discounts and other price reductions.
New World screwworm: A parasitic fly whose larvae burrow into and feed on living tissue in warm-blooded animals.
Nitenpyram: An oral flea treatment active ingredient used in products such as Capstar and PetArmor CapAction.
Salmonella: A group of bacteria that can cause intestinal illness after people or animals ingest contaminated food, water, or fecal material.
Sponsor (animal drug): A person or organization responsible for an animal drug’s regulatory application and supporting information.
Tariff: A tax charged on imported goods.
References
- Chewy, Inc. “Chewy Announces Second Quarter 2026 Financial Results.” Earnings release, September 9, 2026. https://investor.chewy.com/news-and-events/news/news-details/2026/Chewy-Announces-Second-Quarter-2026-Financial-Results/default.aspx
- Chewy, Inc. “Quarterly Report on Form 10-Q for the Quarterly Period Ended August 2, 2026.” Second-quarter report; filed September 9, 2026, accession 0001628280-26-061018. https://www.sec.gov/Archives/edgar/data/1766502/000162828026061018/chwy-20260802.htm
- Vet Plus, Inc. (Fi). “Fi Recalls Supplements for Dogs Because of Possible Salmonella Contamination.” Company recall announcement, September 3, 2026; published by FDA September 8, 2026. https://www.fda.gov/safety/recalls-market-withdrawals-safety-alerts/fi-recalls-supplements-dogs-because-possible-salmonella-contamination
- US Food and Drug Administration. “FDA Issues Emergency Use Authorization for Drugs to Prevent and Treat New World Screwworm in Dogs and Cats.” News release, September 3, 2026. https://www.fda.gov/news-events/press-announcements/fda-issues-emergency-use-authorization-drugs-prevent-and-treat-new-world-screwworm-dogs-and-cats
- US Food and Drug Administration. “Letter of Authorization Capstar (nitenpyram) tablets for New World Screwworm.” Emergency Use Authorization 006688 for Sergeant’s Pet Care Products LLC, September 3, 2026. https://www.fda.gov/media/194575/download
- US Food and Drug Administration. “Letter of Authorization for V-006661.” Revised Emergency Use Authorization 006661 for Felix Pharmaceuticals’ Nitenpyram Tablets, September 3, 2026. https://www.fda.gov/media/193064/download
- Samantha Taylor, Natalie Finch, Sarah Caney, Jonathan Elliott, Rebecca Geddes, Femke Mortier, Valerie Parker, Jessica Quimby, Gilad Segev, and Joanna White. “2026 iCatCare consensus guidelines on the diagnosis and management of chronic kidney disease in cats.” Journal of Feline Medicine and Surgery 28(9):1–40. Consensus guidelines; first published online September 3, 2026. https://journals.sagepub.com/doi/10.1177/1098612X261466553
- Petco Health and Wellness Company, Inc. “Petco Reports Second Quarter 2026 Results.” Earnings release, September 2, 2026; also furnished as Exhibit 99.1 to Form 8-K, accession 0001193125-26-380189. https://ir.petco.com/news-releases/news-release-details/petco-reports-second-quarter-2026-results
- Petco Health and Wellness Company, Inc. “Form 10-Q for the quarterly period ended August 1, 2026.” Quarterly report; filed September 4, 2026, accession 0001193125-26-383639. https://www.sec.gov/Archives/edgar/data/1826470/000119312526383639/woof-20260801.htm
- Petco Health and Wellness Company, Inc. “Form 10-K for the fiscal year ended January 31, 2026.” Fiscal 2025 annual report; filed March 13, 2026, accession 0001193125-26-106114. https://www.sec.gov/Archives/edgar/data/1826470/000119312526106114/woof-20260131.htm