From Christmas Treats To GPS Collars: How Americans Are Still Spending On Pets And What It Means For Pet Care Stocks In 2026

U.S. pet spending proved more resilient than many other consumer categories in 2025, even as households faced persistent affordability pressures, reinforcing the sector’s defensive appeal while exposing clear shifts in how and where money is being spent.

According to the Bureau of Labor Statistics, pet and pet product inflation eased to 0.3% year over year in November, down from 1% in September, offering modest relief after years of elevated costs. Broader cost-of-living pressures persist, however, with animal welfare groups warning of rising "pet poverty" despite the U.S. remaining home to nearly 94 million pet-owning households.

Still, demand held firm, underpinned by emotional attachment. A survey by the Human Animal Bond Research Institute found that 97% of U.S. dog and cat owners consider their pets family members, helping explain why spending on animals has remained comparatively insulated.

Holiday Data Shows Resilience But Also A Shift In Mix

That durability was evident during the 2025 holiday season. According to the American Pet Products Association (APPA), about half of dog owners and four in ten cat owners planned to buy Christmas gifts, spending roughly $30 per gift on average.

Instead of novelty toys and impulse purchases, demand skewed toward pet technology, enrichment tools, and health-oriented products like GPS collars, automated feeders, and even pet insurance— positioned as practical, longer-term investments rather than festive indulgences.

“Younger pet owners are moving toward technology and DIY solutions as they try to balance wellness with affordability,” Hiro Takemasa, senior consumer lifestyles analyst at Mintel, said in a note, adding that value has become a central consideration.

A Two-Speed Pet Economy Emerged In 2025

Industry experts and analysts say the year also clarified a growing bifurcation in pet spending.

“The upper quartile of earners really hasn't changed their consumption pattern,” John Tilson, head of the Consumer group at Brown Gibbons Lang & Company, told Benzinga. “They continue to buy super-premium food, treats, and accessories.”

By contrast, Tilson said the remaining roughly 75% of households have traded down, shifting from premium and super-premium offerings toward value and store brands— a trend that has quietly benefited private-label producers and lower-priced platforms, many of them backed by private equity.

That divergence shaped operating performance across the sector and increasingly influenced where investors deployed capital.

Pet Care Stocks To Watch Heading Into 2026

Bankers argue that pet care continues to stand out structurally within consumer discretionary, supported by resilient demand and lower exposure to tariffs and import volatility than many other consumer goods categories. That dynamic has helped limit margin pressure and sustain investor interest, even as deal activity slowed after early 2022.

Public markets broadly reflected those trends in 2025. Below are key pet care stocks investors are watching as the sector heads into 2026, compiled using data from Benzinga Pro.

• Pet e-commerce retailer Chewy Inc. (NYSE:CHWY) benefited from value-driven consumer behaviour in 2025, with growth led by higher unit volumes and its Autoship subscription service rather than price increases. While the stock trades at a premium valuation, analysts point to nearly 62% upside, reflecting confidence in its recurring-revenue model as affordability pressures persist.
  

• Animal health and veterinary pharmaceuticals company Zoetis Inc. (NYSE:ZTS) delivered mixed results, beating earnings expectations but citing fewer vet visits and cautious consumer spending. Trading at a P/E of 20.8 with roughly 10% upside, the stock is widely viewed as a defensive anchor within the sector, appealing to investors prioritizing stability over high growth.
  
• Pet medical insurance provider Trupanion Inc. (NASDAQ:TRUP) capitalized on rising veterinary costs by positioning insurance as a budgeting tool, supporting subscription revenue growth even as enrolment gains moderated. Analysts see nearly 59% upside, though the stock's elevated P/E of 104.9 underscores expectations for long-term penetration rather than near-term profitability.
  
• Premium fresh pet food maker Freshpet Inc. (NASDAQ:FRPT) showed that premium demand still exists through strong volume-led growth, though analysts have warned that competition and economic pressure could constrain upside as consumers remain selective.
  

• Veterinary diagnostics and testing company IDEXX Laboratories Inc. (NASDAQ:IDXX) continues to be viewed as a high-quality compounder with recurring-revenue characteristics, even as softer clinic traffic weighed on growth expectations in 2025. The stock trades at a P/E of 54.1, with analysts pointing to more than 24% upside tied to long-term demand for diagnostics and preventative care.

Except for IDEXX, all the stocks will have ended 2025 lower, but analysts say the pullback has sharpened investor focus on fundamentals rather than short-term price performance, particularly as demand holds steady. To compare these names across growth, value, quality, and momentum, check out Benzinga's proprietary Edge Rankings.

Will 2026 And 2027 Mark A Turning Point?

According to Tilson, muted M&A over the past three years reflects valuation gridlock, not deteriorating fundamentals.

“The biggest question is whether buyers will pay pre-2022 valuations or whether there’s going to be an adjustment downward, and that adjustment really hasn't happened yet.”

As a result, a backlog of potential sellers has built up across the sector, particularly among private-equity-owned businesses approaching the end of their hold periods.

“We think 2026 and 2027 will be very strong years for transaction activity,” Tilson said, with capital likely to flow across premium, value, and contract-manufacturing segments once pricing expectations reset.

Still, not all categories are expected to benefit equally. Accessories, many of which are heavily sourced from China, remain exposed to tariff risk and intensifying competition from overseas manufacturers selling directly through platforms such as Amazon.com Inc (NASDAQ:AMZN) and Temu, pressuring margins and valuations.

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