Chewy (CHWY 27.14%) is coming off an incredible 2020. While many businesses were devastated by the adverse economic effects of the coronavirus pandemic, Chewy's exclusively online business model was made to thrive in moments like that. 

As a result, sales surged at Chewy.com. A big part of the sales increase came from new customers who ordered from Chewy for the first time during the pandemic. Active customers will be a major key for Chewy as the world recovers from COVID-19. Since it was a major beneficiary of business during the pandemic, investor worry is that Chewy may lose some of the newly acquired customers as economies reopen. 

That's why when the online pet store reports first-quarter results on Thursday, June 10, the active customer total is what you will want to know. 

Person playing with pet dog outside.

Image source: Getty Images.

Folks brought home a record number of pets in 2020

In that regard, 2020 was an excellent year for Chewy. Here's what management had to say on the matter in the fourth-quarter shareholder letter: 

We added 5.7 million net active customers in 2020, reflecting 42.7 percent annual growth. The customer cohorts we acquired in 2020 were highly engaged and displayed similar, or in some cases stronger, purchase and repurchase behavior compared to previous cohorts. These positive behaviors were driven by a wider product assortment, and by our growing set of customer offerings such as gift cards, personalized products, compounding services, and "Connect with a Vet."

That growth in customers brought Chewy's total active customer count to 19.2 million at the end of Q4. As already mentioned, one part of Chewy's customer acquisition had to do with customers moving shopping online to avoid potential COVID-19 contamination in stores. The other significant influence on customer acquisition results from a record number of households bringing home a pet in 2020.

Indeed, according to industry analysts, the number of U.S. pet-owning households increased by 5.7% in 2020, a significant acceleration from the pre-pandemic, five-year compound annual growth rate (CAGR) of 0.6%. In other words, 2020 packed almost 10 years of pet ownership into a single year. People were spending a lot more time at home during the pandemic. Some who lived many miles away from family understandably desired the company of a pet for several reasons, including alleviating loneliness and making the time at home more enjoyable.

Now that states are easing business restrictions, and every U.S. adult who wants to can get access to a coronavirus vaccine, folks are not homebound any longer. So it will be interesting to observe the initial phases of an economic reopening on Chewy's customer acquisition trends. 

A puppy running with a chew toy in its mouth.

Image source: Getty Images.

What this could mean for shareholders

Analysts on Wall Street expect Chewy to report revenue of $2.13 billion and a loss per share of $0.03. Revenue expectations are on the high end of what Chewy management guided for the quarter and would be an increase of 31% from last year.

Interestingly, the fourth quarter was the first in the company's history where it reported a positive net income, as it squeaked out a 1% net profit margin. However, analysts expect the company to return to reporting a loss on the bottom line. Still, it would not be out of the question for Chewy to report a surprise positive net income for the second straight quarter. Profit margins for Chewy will not only rely on overall revenue but also on the mix of revenue. Chewy generates a higher profit margin on sales of its proprietary brands, so a higher mix of that overall could increase profits.

Chewy stock is trading at a forward price-to-sales ratio of 3.4, which is down significantly from January when it was trading at a P/S ratio over six. The market could be anticipating Chewy's prospects diminishing as economies reopen, but the selling appears to be overdone. Chewy still has the long-run secular tailwind at its back of sales moving from brick-and-mortar stores to e-commerce.