Chewy Exceeds Expectations, Boosts Outlook

On September 9, 2026, Chewy, Inc. announced its fiscal second-quarter financial performance, revealing net sales of $3.33 billion, marking a 7.3% increase from the previous year. The company's adjusted earnings per share nearly doubled to $0.36, surpassing analyst projections. This strong performance prompted Chewy to elevate its revenue and profitability forecasts for the full fiscal year.

The company's recurring revenue from Autoship remains a robust foundation, growing 9.3% to $2.82 billion and constituting 84.6% of total net sales. Chewy is also expanding beyond its core retail operations. Chewy Health, encompassing veterinary care and pharmacy services, experienced triple-digit revenue growth. Additionally, specialty categories like equine and exotics have seen consistent mid-double-digit growth for seven consecutive quarters.

Chewy successfully combined customer acquisition with enhanced profitability. The company added 208,000 net active customers, bringing its total to 21.7 million. It also returned $200 million to shareholders via share repurchases. Management highlighted structural SG&A leverage, automation, and AI-driven cost reductions as key factors contributing to improved margins, demonstrating an ability to increase earnings while investing in growth.

However, some of the reported profitability gains may not be sustainable. CFO Chris Deppe indicated that approximately $10 million in timing benefits and over $5 million in discrete benefits contributed to the quarter's upside. These one-time benefits will not recur, suggesting a potentially slower pace of margin expansion in future periods. Furthermore, core organic growth decelerated to 5.7% from 7.7% in the prior quarter, underscoring Chewy's ongoing need to capture market share and develop new categories for sustained momentum.