• by Sarah Mahoney  @mahoney_sarah, March 27, 2025

A booming quarter from Chewy, signs of stabilization at Petco, and a fresh forecast from the American Pet Products Association all point to one thing: Fluffy and Spot are eating just fine.

The APPA’s new forecast for the year ahead predicts a 3.2% increase in spending on America’s pets, with sales expected to rise to $157 billion in 2025, up from $152 billion in 2024. The number of U.S. households with pets jumped to 94 million, up from 82 million last year—an increase of nearly 15%. And younger generations are powering much of that growth: Gen Z pet owners are the most likely to own multiple animals, with 70% reporting at least two.

Dogs remain the most popular pets, with 51% of households owning one, followed by cats at 37%. But the fastest-growing category is chickens. Driven by rising egg prices and growing interest in backyard farming, chicken ownership climbed 28% year over year, with 11 million households now caring for poultry.

While 77% of respondents in the APPA survey say the economy hasn’t affected their pet ownership, cost concerns are rising. More than a third (37%) cited access to veterinary care as a worry, followed by 22% citing access to other pet care services.

The market’s momentum is mirrored in financial results from two of its leading retailers.

Chewy’s Q4 net sales climbed 15% to $3.25 billion, with net income of $22.8 million—down from $31.9 million a year ago but still ahead of expectations. Analysts credit the Plantation, Florida-based company’s performance to deeper customer engagement and sharper marketing execution.

“Chewy’s new and reactivated customer improvement appears sustainable with successful marketing programs and healthy cohort dynamics,” writes Seth Basham, an analyst at Wedbush. “The company is also benefiting from building wallet share initiatives and a rapidly growing sponsored program, albeit with growth now coming from lower-margin offsite ads.”

Jaime Katz, senior equity analyst at Morningstar, noted the company’s auto-ship penetration rose to 80.6%, up from 76.2% a year ago—evidence of sticky, long-term customer behavior. “Chewy’s outperformance reflects the strength of the firm's value proposition and ongoing investments in the customer experience,” she wrote. However, Katz added that softer discretionary spending likely held back net sales per active customer, which grew 6.3%—below Morningstar’s 12% projection.

At Petco, signs of stabilization are emerging, even as revenue slipped 7.3% to $1.6 billion for the quarter. Net losses narrowed to $13.8 million, an improvement from $22.6 million the year prior. New CEO Joel Anderson is leaning into a data-driven turnaround effort, pivoting the San Diego-based brand from its “health and wellness” identity to a broader positioning rooted in emotional connection and pet-parent relevance.

“The results demonstrate solid progress under new leadership to return the business model to retail operating excellence,” says Basham. He notes that Petco’s efforts are increasingly anchored in analytics and emotional storytelling, with potential to differentiate in a crowded omnichannel market.

Marketers should take note: Pet shoppers—particularly younger ones—are omnichannel by default. The APPA reports that 51% of pet owners shop online and 47% shop in-store. And their influence extends beyond checkout. Among HR professionals and senior leaders surveyed, 80% say pets benefit the workplace, with the same number viewing pet policies as talent attractors. Seventy-five percent say pets-at-work initiatives are helping drive return-to-office efforts.