Chewy (CHWY) Earnings Date & Reports

Key Takeaways

• Chewy reported second-quarter fiscal 2026 net sales of $3.33 billion, up 7.3% year over year and slightly above the consensus estimate of $3.32 billion.
• Adjusted earnings per share (EPS) came in at $0.36, matching analyst expectations; net income on a generally accepted accounting principles (GAAP) basis was $80.5 million, or $0.20 per diluted share.
• Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) rose to $226.7 million, a 6.8% margin that exceeded the company's guidance of 6.3% to 6.4%.
• Active customers grew 3.8% year over year to 21.7 million, while Autoship sales climbed 9.3% to reach 84.6% of total net sales.
• Management raised its full-year fiscal 2026 outlook, lifting adjusted EBITDA margin guidance to a range of 6.7% to 6.8%.

Earnings Context and Why It Matters

Chewy is a leading online retailer of pet food, supplies, and healthcare services, and its quarterly results offer a closely watched read on discretionary consumer spending. The pet category has been under pressure as inflation-conscious households pull back on premium and non-essential purchases, making this report a test of whether Chewy can keep gaining market share while protecting profitability. Investors also track the company's recurring Autoship model, its expanding Chewy Health and veterinary offerings, and recent acquisitions of SmartPak and Modern Animal as drivers of longer-term growth. Because management reaffirmed a cautious demand outlook, this quarter's margin performance and updated guidance carry added weight for the stock.

Reported Results

For the second quarter of fiscal 2026 (the 13 weeks ended August 2, 2026), Chewy reported net sales of $3.33 billion, a 7.3% increase from $3.10 billion in the prior-year period. Excluding contributions from the SmartPak and Modern Animal acquisitions, organic net sales rose 5.7%. Adjusted EPS of $0.36 matched the analyst consensus, while GAAP net income improved to $80.5 million, or $0.20 per diluted share, from $62.0 million, or $0.14 per diluted share, a year earlier.

Adjusted EBITDA grew $43.4 million year over year to $226.7 million, and adjusted EBITDA margin expanded 90 basis points to 6.8%, above the company's prior guidance. Gross margin held flat year over year at 30.4%. Chewy ended the quarter with 21.7 million active customers, up 3.8%, and net sales per active customer (NSPAC) of $602. Autoship customer sales increased 9.3% to $2.82 billion, representing 84.6% of total net sales. Free cash flow was $90 million, down from $106 million in the year-ago quarter, reflecting working-capital timing and higher capital expenditures.

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Market Reaction and Investor Sentiment

Chewy shares rose modestly, about 0.8%, following the announcement, a muted reaction that reflects a mixed read on the results. Revenue came in slightly above consensus and adjusted EBITDA comfortably exceeded guidance, but adjusted EPS was merely in line, and management disclosed that much of the margin outperformance stemmed from timing-related and one-time benefits—including tariff refunds and shifted rebates—that are not expected to recur. Those caveats, combined with a still-cautious consumer backdrop, tempered enthusiasm even as the company raised its full-year profitability outlook. Sentiment heading into and out of the report remained anchored on the durability of Autoship growth and Chewy's ability to convert scale into sustained margin expansion.

Forward Outlook and Key Factors to Monitor

Chewy raised its full-year fiscal 2026 guidance, now projecting net sales of $13.46 billion to $13.57 billion and an adjusted EBITDA margin of 6.7% to 6.8%, with organic net sales growth of 5.5% to 6.3%. For the third quarter, the company guided to net sales of $3.323 billion to $3.358 billion and an adjusted EBITDA margin of 6.6% to 6.7%.

Investors should watch several factors over the coming quarters. First, gross margin is expected to decline modestly on a sequential basis in the third quarter as the timing-related benefits from the second quarter normalize, while elevated fuel costs remain a headwind through the balance of the year.

Second, the integration of SmartPak and Modern Animal will be a key execution focus, and management noted these acquisitions still represent a modest drag on adjusted EBITDA margin in the near term. Third, progress in Chewy Vet Care and Chewy Health, both of which delivered strong growth, will be closely monitored as longer-term customer-acquisition and retention engines.

Finally, management continues to expect AI-related initiatives to generate low-tens-of-millions of dollars in cost savings in fiscal 2026, scaling to roughly $50 million on an annualized basis in fiscal 2027. Active customer growth, NSPAC trends, and Autoship penetration remain the core metrics investors will use to judge whether Chewy can sustain its growth momentum and market-share gains through a still-soft consumer environment.

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