Chewy (CHWY) risk factors, FY2026 10-K

Risks Related to Our Business and Operations

1. 01Our recent growth rates may not be sustainable or indicative of our future growth and we may not be able to successfully manage challenges to our future growth
2. 02Business disruptions and responsive actions may adversely affect our business operations, financial performance, liquidity and cash flow for an unknown period of time
3. 03If we fail to acquire and retain new customers, or fail to do so in a cost-effective manner, we may be unable to increase net sales, improve margins, and maintain profitability
4. 04If our efforts to satisfy our customers are not successful, we may be unable to acquire new customers in sufficient numbers to continue to grow our business, and we may be required to incur significantly higher marketing expenses in order to acquire new customers
5. 05If we fail to manage our growth effectively, our business, financial condition and results of operations could be materially and adversely affected
6. 06Our continued success is in part dependent on positive perceptions of the Company
7. 07Our operating expenses may increase over the next few years, and we may generate operating losses as we continue to expand our business
8. 08We may be unable to accurately forecast net sales and appropriately plan our expenses in the future
9. 09Our estimate of the size of our addressable markets may prove to be inaccurate
10. 10If we are unable to attract and retain suppliers, we may be unable to maintain or expand our supplier network, which would negatively impact our business
11. 11Shipping is a critical part of our business and any changes in, or disruptions to, our shipping arrangements could adversely affect our business, financial condition and results of operations
12. 12If we do not successfully optimize, operate, and manage the expansion of the capacity of our fulfillment centers, our business, financial condition and results of operations could be harmed
13. 13Our business may be adversely affected if we are unable to provide our customers with a cost-effective platform that is able to respond and adapt to rapid changes in technology
14. 14We are subject to risks related to online payment methods
15. 15Disruptions to SaaS technologies from third parties may adversely affect our business, financial condition and results of operations
16. 16Our failure or the failure of third-party service providers to protect our websites, networks, and systems against cybersecurity incidents, or to otherwise protect our confidential information, could damage our reputation and brand and harm our business, financial condition and results of operations
17. 17Safety, quality, and health concerns regarding our products could affect our business, financial condition and results of operations
18. 18Risks associated with our suppliers and our outsourcing partners, many of which are located outside of the U.S., could materially and adversely affect our business, financial condition and results of operations
19. 19We are subject to extensive laws and regulations and we may incur material liabilities or costs related to complying with existing or future laws and regulations, and our failure to comply may result in enforcements, penalties, recalls, and other adverse actions
20. 20We may inadvertently not comply with various laws and regulations covering our pet health business, which may subject us to reprimands, sanctions, probations, fines, suspensions, or the loss of one or more of our licenses
21. 21Resistance from veterinarians to authorize prescriptions, or their efforts to discourage pet owners from purchasing from us, could cause our sales to decrease and could adversely affect our business, financial condition and results of operations
22. 22Failure to comply with laws and regulations relating to privacy, data protection, cybersecurity, marketing and advertising and consumer protection could adversely affect our business, financial condition and results of operations
23. 23Our ability to utilize net operating loss and tax credit carryforwards, and other tax attributes may be subject to certain limitations
24. 24We may be unable to adequately protect our intellectual property rights. Additionally, we may be subject to intellectual property infringement claims or other allegations, which could result in substantial damages and diversion of management’s efforts and attention
25. 25We may be subject to personal injury, workers’ compensation, product liability, labor and employment, and other claims in the ordinary course of business
26. 26We rely on the performance of members of management and highly-skilled personnel, and our business could be harmed if we are unable to attract, develop, motivate, and retain highly-qualified and skilled employees
27. 27Uncertainties in economic conditions, industry trends, and market conditions, and their impact on the pet market, could adversely impact our business, financial condition and results of operations
28. 28Significant merchandise returns or refunds could adversely affect our business, financial condition and results of operations
29. 29Our business results could be adversely affected if our new offerings are unsuccessful
30. 30Regulation of the sale of insurance for pets is subject to change and future regulations could harm our business, financial condition and results of operations
31. 31If we cannot successfully manage the unique challenges presented by international markets, we may not be successful in expanding our operations outside the U.S. and Canada

Risks Related to Our Industry

1. 32Competition in the pet products and services health and retail industries, especially Internet-based competition, is strong and presents an ongoing threat to the success of our business
2. 33Government regulation of the Internet and e-commerce is evolving, and unfavorable changes or failure by us to comply with these regulations could harm our business, financial condition and results of operations
3. 34Changes in tax treatment of companies engaged in e-commerce may adversely affect the commercial use of our websites and mobile applications and our financial results

Risks Related to Our Controlling Stockholders

1. 35Substantial future sales by affiliates of the BCP Stockholder Parties or others of our common stock, or the perception that such sales may occur, could depress the price of our Class A common stock
2. 36There could be potential conflicts of interests between us and affiliates of the BCP Stockholder Parties. In addition, our directors may encounter conflicts of interest involving us and the other entities with which they may be affiliated, including matters that involve corporate opportunities

Risks Related to Ownership of Our Class A Common Stock

1. 37Our stock price has been, and may continue to be, volatile and may decline regardless of our operating performance
2. 38The dual class structure of our common stock may adversely affect the trading market for our Class A common stock
3. 39Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of the Company more difficult, limit attempts by our stockholders to replace or remove our current management, and limit the market price of our Class A common stock
4. 40Our amended and restated certificate of incorporation includes exclusive forum provisions, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees
5. 41The BCP Stockholder Parties control the direction of our business and the concentrated ownership of our common stock will prevent other stockholders from influencing significant decisions
6. 42We are a “controlled company” within the meaning of the rules of NYSE and rely on exemptions from certain corporate governance requirements
7. 43Restrictions in our revolving credit facility could adversely affect our operating flexibility
8. 44The terms of our revolving credit facility may restrict our ability to pay dividends
9. 45We cannot guarantee that our Repurchase Program will be fully consummated or that it will enhance long-term stockholder value. Share repurchases could also increase the volatility of the trading price of our common stock and could diminish our cash reserves
10. 46Future litigation could have a material adverse effect on our business, financial condition and results of operations
11. 47Our ability to raise capital in the future may be limited and our failure to raise capital when needed could prevent us from growing
12. 48We may experience fluctuations in our tax obligations and effective tax rate, which could materially and adversely affect our business, financial condition and results of operations
13. 49The requirements of being a public company require significant resources and management attention and result in significant legal and financial compliance costs, and changing laws, regulations and standards are creating uncertainty for public companies