• In today’s CEO Daily: Jason Del Rey talks to Chewy CEO Sumit Singh about chaos, pets, and recessions.
• The big story: Trump cabinet members disclose their crypto holdings.
• The markets: Low drama.
• Analyst notes from Guggenheim on Tesla, Goldman Sachs on stocks, Convera on the weakening dollar.
• Plus: All the news and watercooler chat from Fortune.
Good morning. I’ve just returned from SXSW, the mega entertainment and tech conference in Austin which is always a whirlwind of deals, announcements, and—of course—CEOs talking their book. I got a chance to chat with Chewy CEO Sumit Singh, who, as the head of an e-commerce company that survived the intense ebbs and flows of consumer demand during COVID, has some experience with navigating chaos.
So when it comes to the current macroeconomic anxiety—inflamed by potential stagflation, Trump-induced trade wars, and a stock market downturn—Singh’s approach is a pragmatic one.
“There’s a low signal-to-noise ratio right now across multiple industries,” Singh acknowledged in a discussion with me on stage Monday. “[But] you deal with chaos by dealing with chaos. You focus on what you can control.”
For Singh and his leadership team at Chewy, now No. 362 on the 2024 Fortune 500 with more than $11 billion in revenue, that means a focus on the business inputs that matter most: unsexy practices like keeping inventory in stock at high levels; maintaining customer service levels that have become the company’s calling card; and acquiring and retaining customers affordably. And that’s especially true when the output—such as his company’s stock price—is faltering. Chewy’s stock is down more than 11% over the last month, or about 50% more than the drop of the S&P 500.
“If those inputs are in line, then even if, for the short term, the output seems a little bit off, the long-term output will be fine,” Singh said.
Singh radiates a natural optimism but Chewy also boasts a relatively strong market position. Only a small fraction of the pet merchandise the company sells originates in China, so tariffs wouldn’t be devastating. Also, while Singh no longer believes Chewy is totally recession-proof, he does trust it’s recession-resistant because pet parents, as the company calls them, will continue to spend on the food their pets need when budgets get tight, even if some of their more discretionary spending with Chewy goes away. In fact, about 75% of Chewy’s sales come courtesy of the company’s automated replenishment shipping service.
But there’s also a more personal reason why Singh says he’s able to play it cool even when the world around him seems to be spinning with upheaval: his homeland. He spent his first 20-plus years in India but has now lived for more than two decades in the U.S. As he puts it: “India is inherently chaotic.” These days, the same could be said about the U.S. — Jason Del Rey
More news below.
Contact CEO Daily via Diane Brady at diane.brady@fortune.com
|
|
|
State of the US Consumer: Winter 2025 Deloitte's ConsumerSignals highlighted an uptrend in financial well-being sentiment, but uncertainty around spending confidence remains. Explore insights here
|
|
|
Trump’s crypto cabinet: Fortune reviewed financial disclosures for President Donald Trump’s cabinet members and found six of the 22 listed Bitcoin or other holdings in cryptocurrency. Details here.
Don’t write off Tesla yet. The car company’s European sales may be dismal but the company has a cyclical sales cycle, according to James Morris of WhichEV.net.
Poland wants U.S. nukes. President Andrzej Duda called for the U.S. to move some nuclear missiles into his country, as a deterrant to Russian aggression. Context: Ukraine once had a large nuclear arsenal but gave it up in the early 1990s upon the dissolution of the Soviet Union—a move that Kyiv now regards as a mistake.
Consumer angst at all levels. U.S. shoppers are reining in their spending across the board, CEOs say. Rich and poor alike are reducing their spending. At the high end, luxury sales are down 9.3%, per Citi credit card data. In convenience stores, volume fell by 4.3% for the year ending Feb. 23, according to Circana.
Polls move against Trump. 45% of Americans in a CNN survey approved of the president vs 54% disapproving; 56% of voters disapproved of his handling of the economy.
SpaceX astronaut rescue called off. SpaceX scrubbed a planned launch to rescue U.S. astronauts Butch Wilmore and Suni Williams yesterday, due to a technical fault. The pair have been trapped on the International Space Station for nine months. SpaceX will try again on Friday.
Intel appoints new CEO. Intel (No. 79 on the Fortune 500) named industry veteran Lip-Bu Tan as the struggling chipmaker’s new CEO, replacing the interim co-CEOs who were appointed in December after former CEO Pat Gelsinger resigned. The company’s stock jumped more than 10% after hours following the news, but Tan has a tall order in keeping Intel competitive.
Every Friday morning, the weekly Fortune 500 Power Moves column tracks Fortune 500 company C-suite shifts—see the most recent edition.
Inflation cools but worries don’t. Government data released on Wednesday indicates that inflation cooled in February more than expected, but an economist at Morgan Stanley Wealth Management says the effects of Trump’s tariffs haven’t kicked in yet. Ellen Zentner, the chief economic strategist at the bank, told Fortune that “no one should expect the Fed to start cutting rates immediately.”
AI: A CEOs’ best friend. Almost three-fourths of the CEOs surveyed in new research by SAP said they trust AI more than their friends or colleagues when it comes to business decisions.
The markets
• The S&P 500 closed up 0.5% at 5,599.30 yesterday (it’s still down 4.8% YTD). The Nasdaq Composite rose 1% from big gains in tech stocks—Palantir was up 7%. This morning, European markets ticked upward and U.S. futures for the S&P were flat, pre-opening bell.
From the analysts
• Guggenheim on Tesla: “Lowering our 1Q delivery estimate to 358K from 405K - well below consensus at 420K. We estimate all major regions will contribute to downside in 1Q vs. 4Q, but we are not seeing anything in the data that suggests deliveries are tracking to hit the ~420K implied by consensus … the growing momentum of protests could be impacting sales and/or store traffic in the US and Europe … While the protests could prove fleeting, we believe that protests and partisanship are having an impact on demand,” per Ronald Jewsikow.
• Goldman Sachs on stocks: “From ‘Magnificent 7’ to ‘Maleficent 7.’ During the past three weeks the S&P 500 index has plummeted by 9% from its all-time high with more than half of the near-correction stemming from a 14% plunge in the share prices of the Mag 7 stocks … We lower our 2025 year-end S&P 500 index target to 6200 (from 6500) … Our new index target suggests an 11% price gain during the balance of the year,” per David Kostin et al.
• Convera on the weakening dollar: “Traditionally, escalating trade tensions would drive demand for the dollar as a safe-haven asset, but investors are now looking beyond short-term flows and focusing on the economic damage these tariffs could inflict,” per Boris Kovacevic.
• Bespoke Investment Group on the Nasdaq: “[Tuesday] was an awful day for the tech-heavy Nasdaq 100, which closed more than three standard deviations below its 50-day moving average. Translated: the index has gotten deeply oversold.”
|
|
|
Thanks for reading. If you liked this email, pay it forward. Share it with someone you know. Did someone share this with you? Sign up here. For previous editions, click here.
To view all of Fortune's newsletters on the latest in business, go here.
|
|
|
|
