Chewy, Inc. reported fiscal fourth‑quarter and full‑year 2025 results on March 25, 2026, delivering net sales of $12.6 billion, up 8.3% on a normalized basis, and a fourth‑quarter revenue of $3.26 billion. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 26% to $719.2 million, giving an adjusted EBITDA margin of 5.7%. Free cash flow reached $562.4 million, and the active customer base grew 4% year‑over‑year to 21.3 million, with Autoship accounting for 83.3% of total sales.
The company’s earnings beat expectations, with an adjusted EPS of $0.27 versus a consensus estimate of $0.09, a surprise of $0.18 or 200% over the low estimate. The beat was driven by disciplined cost management that lowered SG&A as a percentage of sales, a favorable mix shift toward high‑margin health and wellness categories, and operational efficiencies that expanded the adjusted EBITDA margin by 90 basis points year‑over‑year.
Margin expansion was a key driver of the strong results. The adjusted EBITDA margin of 5.7% represented a 90‑basis‑point improvement over the prior year, reflecting the company’s ability to leverage scale, implement AI‑driven efficiencies, and benefit from a premium product mix. These gains offset the modest increase in cost inflation and allowed Chewy to maintain profitability even as it continued to invest in growth initiatives.
Chewy reiterated its 2026 outlook, projecting net sales of $13.6 billion to $13.75 billion and an adjusted EBITDA margin of 6.6% to 6.8%. The guidance signals management’s confidence in sustaining growth momentum and margin expansion, underpinned by continued demand in the pet‑care category and the company’s focus on scaling its Autoship ecosystem. The company also highlighted strategic growth initiatives, including the expansion of Chewy Vet Care to 18 clinics and the launch of the Chewy Made private‑brand platform to boost consumables penetration and margins.
"We exited 2025 from a position of real strength: $12.6 billion in net sales or 8.3% growth, $719 million of adjusted EBITDA or 26% growth, record free cash flow of $562 million, and 21.3 million active customers," said Sumit Singh, Chief Executive Officer of Chewy. "Fiscal year 2025 is off to a strong start as the momentum at Chewy continues. We delivered topline growth exceeding the high‑end of our net sales guidance range, year‑over‑year growth in active customers, and compelling profitability and free cash flow generation. These results are a testament to the resiliency of the pet category and underscore the strength of Chewy's value proposition and our ability to continue to gain market share." Management also noted that further margin expansion will be driven by SG&A leverage, mix shifts toward premium and health categories, and AI efficiencies that are expected to contribute a low‑tens‑of‑millions benefit in 2026 and $50 million+ annualized savings in 2027. Strategic growth initiatives include scaling Chewy Vet Care and launching the Chewy Made private‑brand platform to boost consumables penetration, margins, and NSPAC growth.
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