Chewy Raises Full-Year Outlook After Strong Quarter
Net sales reached $3.33 billion, up 7.3%, and adjusted EBITDA margin hit 6.8% as Chewy lifted its full-year revenue and profitability outlook.
Chewy, Inc. (CHWY), the online pet-products retailer, raised its full-year revenue and profitability outlook after a second quarter in which net sales landed at the high end of its guidance and adjusted EBITDA margin exceeded the company’s expectations.
Net sales were $3.33 billion for the 13 weeks ended August 2, 2026, up 7.3% from a year earlier, or 5.7% excluding contributions from SmartPak and Modern Animal. That year-over-year rate slowed from 7.7% in the first quarter of fiscal 2026. Chief Executive Officer Sumit Singh said the company delivered “growth of 7.3% to $3.33 billion of net sales at the high end of our guidance, and a 6.8% Adj. EBITDA margin, exceeding our expectations.”
Adjusted EBITDA was $226.7 million, up $43.4 million from a year earlier, and the adjusted EBITDA margin was 6.8%, 90 basis points higher year over year. Gross margin was 30.4%, unchanged from a year earlier. Net income was $80.5 million, including share-based compensation expense and related taxes of $85.9 million, for a net margin of 2.4%. Diluted earnings were $0.20 a share. Adjusted net income was $148.8 million, and adjusted diluted earnings were $0.36 a share.
Singh said the durability of the recurring revenue base, continued customer growth, and disciplined execution gave the company confidence to raise the full-year outlook while continuing to invest in opportunities that deepen customer engagement.
Active customers were 21.705 million, including about 43 thousand attributable to SmartPak; Modern Animal customer additions were excluded. Net sales per active customer were $602. Autoship customer sales were $2.82 billion, or 84.6% of net sales. GAAP income from operations was $92.0 million. Selling, general and administrative expense was $704.4 million and advertising and marketing was $214.8 million.
Free cash flow was $89.5 million, down 15.5% from a year earlier, as capital expenditures rose to $47.9 million from $28.0 million. Net cash provided by operating activities was $137.4 million. Free cash flow may vary with the timing and level of capital expenditures, including investments in fulfillment capacity, pharmacy facilities, veterinary clinics, and technology, as well as working-capital changes.
On the balance sheet as of August 2, cash and cash equivalents were $611.0 million, down from $860.1 million at February 1, 2026. Long-term debt, net, was $588.7 million, versus none at February 1. Goodwill was $334.1 million and intangible assets, net, were $149.7 million. Class A shares outstanding were 224.99 million. For the 26 weeks ended August 2, cash used in acquisitions, net of cash acquired, was $552.8 million, and proceeds from debt were $811.7 million.
The company will raise its full-year revenue and profitability outlook after the 6.8% adjusted EBITDA margin exceeded expectations.