Chewy Reaches Settlement Agreement in Derivative Lawsuit

Chewy ( (CHWY) ) has provided an announcement.

On April 6, 2026, a Special Litigation Committee of Chewy’s board, the company and various BC Partners-affiliated entities and directors entered into a stipulation and settlement agreement with stockholder Eric Gilbert to resolve a derivative suit in Delaware Chancery Court challenging Chewy’s approval of an October 2023 “Downstream Merger” tied to BC Partners’ sale of PetSmart. The court set a June 23, 2026 hearing on the proposed settlement and Chewy has posted the agreement and settlement notice on its investor relations website, marking a potential resolution to governance and fiduciary-duty questions around a transaction alleged to have favored the former controlling stockholder over minority investors.

The derivative complaint, filed in November 2024 after a books-and-records probe, accused BC Partners entities as controlling stockholders and several Chewy directors of breaching fiduciary duties by causing Chewy to assume tax liabilities from the PetSmart sale under terms purportedly unfair to the company and its minority shareholders. Chewy’s board responded by expanding its membership in early 2025, appointing independent directors Deborah Ellinger and Nat Goldhaber to form a Special Litigation Committee that conducted a months-long investigation, after which the parties engaged in mediation and reached an agreement in principle in February 2026 to settle the claims with contributions from defendants, subject to court approval.

The most recent analyst rating on (CHWY) stock is a Buy with a $45.00 price target. To see the full list of analyst forecasts on Chewy stock, see the CHWY Stock Forecast page.

Spark’s Take on CHWY Stock

According to Spark, TipRanks’ AI Analyst, CHWY is a Neutral.

The score is primarily driven by mixed financial performance—profitability and cash generation have improved versus prior years, but TTM revenue and free cash flow declines plus thin margins and meaningful leverage raise execution risk. Technicals are weak with the stock below key long-term moving averages, and valuation remains demanding with a high P/E and no dividend support. Offsetting these, corporate actions (expanded buyback and finalized CFO transition with profitability focus) are moderately positive.

To see Spark’s full report on CHWY stock, click here.

More about Chewy

Founded in 2011, Chewy, Inc. is a leading online pet supplies retailer incorporated in Delaware and co-headquartered in Plantation, Florida and Boston, Massachusetts. The company focuses on e-commerce sales of pet food, medications and related products, serving pet owners across the U.S. through a digital-first retail model and leveraging its scale in the growing pet care market.

Average Trading Volume: 8,359,097

Technical Sentiment Signal: Sell

Current Market Cap: $10.84B

For an in-depth examination of CHWY stock, go to TipRanks’ Overview page.