Online pet retailer (NYSE: CHWY) enjoyed a period of skyrocketing pet ownership during the pandemic. Revenue soared 24% in 2021 as pet owners turned to Chewy for its attractive prices and convenient shipping options. The stock soared as well, peaking at around $120 per share in early 2021.

The bill is now coming due. Demand was pulled forward by the pandemic, with new pet households forming that otherwise would have remained pet-free or delayed getting a pet. Even as it wins market share, Chewy is struggling to retain its customer base.

Chewy managed to grow revenue by 4.2% in the fourth quarter of 2023 thanks to heavier spending from its active customers, but the number of active customers declined. Chewy ended the year with 20.1 million active customers, down from 20.7 million at the end of 2021 and down 1.6% year over year.

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Source Fool.com