Building Her Portfolio: Why Chewy Represents a Pivotal Investment Moment as My Daughter Grows

When your daughter reaches 10 years old, you realize time moves differently than you expected. It’s not just another birthday—it’s a milestone that prompts reflection on growth, independence, and the future. For me, this year marked something more: it was time to add her first stock born from her own preference, not just mine. After considering Nintendo, Mondelez, and Rocket Lab USA, she chose Chewy (NYSE: CHWY), and the timing couldn’t be more interesting.

Ever since David Gardner of Motley Fool discussed the Garner-Kretzmann Continuum on his Rule Breakers podcast, the principle stuck with me: own at least one stock for each year of your age. It’s a simple yet profound framework—one stock becomes two becomes five becomes a full portfolio over time. I adopted it for myself, but more importantly, I’ve been building one for my daughter too. Her selections matter because they’re teaching her what it means to own a piece of something real.

Chewy’s Remarkable Transformation: From Overvalued Darling to Undervalued Powerhouse

The Chewy story is a masterclass in how valuation and operational reality can diverge dramatically. After its 2019 debut on public markets, the stock surged to $100 per share by 2021—a classic tale of enthusiasm outpacing fundamentals. Investors fell in love with the concept, and the price reflected fantasy more than reality. The correction was inevitable. Within a few years, shares compressed to around $15, a devastating 85% decline from peak.

Here’s the critical insight: while the stock collapsed, the actual business only got stronger. Sales quintupled. Gross profit margins soared approximately 10 percentage points. Net income and free cash flow margins swung from negative to positive. Most importantly, active customers doubled from 10.6 million in 2019 to 21.2 million today. That’s not coincidence—that’s execution.

Now, down 32% from its 52-week high despite delivering solid earnings, Chewy looks compelling for exactly the reason my daughter’s generation needs to understand: great businesses don’t always have great stock prices at the moment you discover them. Patience and timing matter immensely.

A Daughter’s Natural Investment: Why Chewy Resonates Beyond the Numbers

For a girl who loves the dogs in her life and always anticipates buying them treats and birthday gifts, Chewy feels like hers. This isn’t arbitrary. One of David Gardner’s core teachings is to pick stocks representing your “best vision for the future.” For my daughter, that vision includes caring for the pets she adores. A stock should never feel like a foreign concept disconnected from life—it should spark genuine interest.

What makes Chewy special in this context is its straightforward mission. Unlike something like Rocket Lab, which invokes cutting-edge space exploration (exciting but complex for a 10-year-old to truly grasp), Chewy is about something tangible: delivering what pets need and what pet owners want.

More than that, Chewy’s company values reveal a business that respects its customers deeply. They refund food for customers whose pets have passed away and let them donate the remainder. They send care packages in difficult moments. They’ve created Chewy+, a rewards program for loyalty. These aren’t Wall Street-friendly buzzwords—they’re evidence of how a company thinks.

The Real Story Behind Chewy’s Growth: Operational Excellence Meets Profitability Potential

While 8% sales growth in the most recent quarter appears modest compared to 20% annualized growth over the previous five years, this slowdown reflects maturation, not failure. As a company scales to 21+ million active customers, triple-digit percentage growth becomes mathematically impossible. But here’s what investors miss: Chewy’s real profit acceleration hasn’t arrived yet.

The company is leaning deeper into higher-margin opportunities. Streamlining Autoship (automatic repeat purchases) improves retention and economics. Chewy Vet Care creates sticky, high-margin services. Get Real, the private-label brand, offers significantly better profitability than third-party products. Its advertising business resembles Amazon’s—essentially free money. Chewy+ rewards members who commit to higher spending.

These initiatives suggest that profitability could expand substantially as the company optimizes mix and scale. At a forward earnings valuation of 26 times, Chewy is reasonably priced for a business positioned to grow profits faster than its top line. That’s the exact setup where long-term wealth compounds.

Timing the Opportunity: Why Now Makes Sense for Long-Term Portfolio Building

There’s an art to stock market timing, and most attempts at perfect timing fail. But strategic timing—buying when prices don’t match business quality—is the opposite. It’s what separates accidental wealth from intentional wealth.

My daughter is 10 now. If history teaches anything, the money she invests today could compound for decades. When she’s 25, ready to take over her own portfolio completely, she’ll understand something powerful: she bought a piece of a beloved pet-care business when it was misunderstood and undervalued, nurtured it through her teenage years, and watched it flourish.

That lesson—owning quality during moments of doubt, resisting the urge to sell during volatility, allowing patience to do the heavy lifting—is the education that truly matters. Chewy isn’t just a stock holding. It’s a conversation starter about business, value, growth, and the kind of independent thinking her generation will need.

The share price decline presents opportunity, not warning. For long-term wealth builders, that’s always been where real compounding begins.