Key Takeaways
- Chewy delivered Q4 adjusted EPS of $0.27, significantly exceeding the $0.09 Street estimate by $0.18
- Quarterly revenue reached $3.26 billion, reflecting 8.1% growth on a normalized 13-week comparison
- Customer base expanded 4% to 21.3 million active users; average customer spending increased 2.2% to $591
- Fiscal year 2025 adjusted EBITDA climbed to $719.2 million, up 26%, while generating record free cash flow of $562 million
- Company issued 2026 revenue guidance of $13.6B–$13.75B, surpassing analyst expectations of $13.58B
Shares of Chewy (CHWY) surged Wednesday morning, jumping as much as 11.3% during premarket hours following the online pet retailer’s impressive fourth-quarter performance and upbeat full-year guidance that exceeded analyst projections. The stock traded at approximately $24.98, reflecting gains of roughly 6.5% in early premarket activity.
The company announced adjusted earnings of $0.27 per share for the period ending February 1. This figure substantially surpassed Wall Street’s consensus forecast of $0.09, representing a remarkable $0.18 beat.
Quarterly sales totaled $3.26 billion. While reported growth stood at 0.5% year-over-year, this comparison requires context — the prior year’s quarter spanned 14 weeks compared to 13 weeks in the current period. When normalized to a 13-week comparison, revenue advanced 8.1%.
Profitability metrics demonstrated meaningful improvement during the quarter. The company’s gross margin widened by 90 basis points to 29.4%, while adjusted EBITDA margin strengthened by 120 basis points to reach 5.0%. Adjusted EBITDA for the period hit $162.3 million, representing a $37.8 million increase compared to the prior-year quarter.
Net income for the quarter totaled $39.2 million, translating to 9 cents per diluted share. This marked substantial improvement from the year-ago period’s $22.8 million, or 5 cents per share — effectively doubling profitability year-over-year.
Annual Performance Highlights
For fiscal year 2025 in its entirety, Chewy generated net sales of $12.60 billion — representing 8.3% growth on a normalized 52-week comparison. Adjusted EBITDA climbed to $719.2 million, increasing $148.7 million versus the prior year, with the corresponding margin expanding 90 basis points to 5.7%.
The company achieved record free cash flow of $562 million for the year — a figure that resonates strongly with the investment community.
The active customer count grew 4% to reach 21.3 million during the fourth quarter. Net sales per active customer increased 2.2% to $591, indicating stable purchasing patterns among the company’s existing user base.
Chief Executive Officer Sumit Singh attributed the full-year results to operating from “a position of real strength,” highlighting revenue expansion, EBITDA growth, and unprecedented cash generation.
“That performance underscores the durability of the Chewy model,” Singh noted, expressing confidence in the company’s ability to deliver “continued profitable growth, expanding margins, and strong cash generation in 2026 and beyond.”
Forward Guidance Tops Analyst Projections
Looking ahead to fiscal 2026, Chewy provided full-year net sales guidance ranging from $13.6 billion to $13.75 billion. The Street had been anticipating $13.58 billion, positioning the midpoint of the company’s guidance slightly above consensus estimates.
For the first quarter specifically, Chewy projected adjusted EPS between $0.40 and $0.45 on net sales of $3.33 billion to $3.36 billion. Wall Street analysts had modeled $0.41 per share on revenue of $3.36 billion.
While the Q1 revenue guidance midpoint falls marginally below consensus, the EPS outlook aligns with analyst expectations.
The company’s fiscal 2025 adjusted EBITDA of $719.2 million reflected 26% year-over-year expansion, complemented by record free cash flow of $562 million, capping off an exceptionally strong performance year for the pet supplies retailer.
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