Key Takeaways
- The company delivered Q4 adjusted earnings of $0.27 per share, surpassing the $0.09 Street estimate by a wide margin of $0.18
- Fourth-quarter sales totaled $3.26 billion, representing an 8.1% increase on a normalized 13-week comparison
- Customer metrics remained healthy with 21.3 million active users (up 4%) and average customer spend rising 2.2% to $591
- Fiscal 2025 adjusted EBITDA reached $719.2 million, a 26% annual increase, alongside record free cash flow of $562 million
- Fiscal 2026 revenue outlook of $13.6B–$13.75B exceeds analyst projections of $13.58B
Shares of Chewy (CHWY) surged Wednesday morning following the online pet retailer’s impressive fourth-quarter performance and optimistic full-year guidance that topped Wall Street’s projections. The stock jumped as high as 11.3% during premarket hours, trading around $24.98, representing a gain of approximately 6.5% in early action.
The Florida-based e-commerce company disclosed adjusted earnings of $0.27 per share for its fiscal fourth quarter that concluded on February 1. This figure significantly exceeded Wall Street’s consensus forecast of $0.09 per share, representing an impressive $0.18 beat.
Quarterly sales reached $3.26 billion. While this represents just a 0.5% uptick on a reported basis year-over-year, the comparison is affected by differing reporting periods — last year’s corresponding quarter contained 14 weeks compared to 13 weeks in the current period. When adjusted to a normalized 13-week comparison, revenue growth accelerated to 8.1%.
Profitability metrics showed encouraging improvement across the board. The company’s gross margin widened by 90 basis points to reach 29.4%, while adjusted EBITDA margin expanded 120 basis points to 5.0%. Quarterly adjusted EBITDA totaled $162.3 million, marking a $37.8 million improvement compared to the prior-year period.
Net income for the quarter registered $39.2 million, translating to 9 cents per diluted share. This represents a substantial improvement from the $22.8 million (5 cents per share) recorded in last year’s fourth quarter — effectively doubling bottom-line profits year-over-year.
Annual Performance Highlights
For the complete fiscal year 2025, Chewy generated net sales of $12.60 billion — an 8.3% increase when normalized to a 52-week period. Adjusted EBITDA surged to $719.2 million, climbing $148.7 million from the previous year, while the corresponding margin expanded 90 basis points to 5.7%.
The company achieved record free cash flow of $562 million for the year — a metric that typically resonates strongly with the investment community.
Customer engagement metrics remained robust, with active customers increasing 4% to reach 21.3 million in the fourth quarter. Meanwhile, net sales per active customer advanced 2.2% to $591, demonstrating consistent spending patterns among the company’s established user base.
Chief Executive Sumit Singh characterized the annual performance as emanating from “a position of real strength,” highlighting the combination of revenue expansion, EBITDA growth, and unprecedented cash generation.
“That performance underscores the durability of the Chewy model,” Singh remarked, expressing confidence in the company’s ability to sustain “continued profitable growth, expanding margins, and strong cash generation in 2026 and beyond.”
Forward Outlook Tops Consensus
Looking ahead to fiscal 2026, Chewy projected full-year net sales between $13.6 billion and $13.75 billion. This range surpasses the analyst consensus of $13.58 billion, with the guidance midpoint coming in slightly above Street expectations.
For the first quarter specifically, the company anticipates adjusted earnings per share of $0.40 to $0.45 on net sales ranging from $3.33 billion to $3.36 billion. The Street had been modeling $0.41 per share on $3.36 billion in quarterly revenue.
While the Q1 revenue guidance midpoint lands marginally below consensus estimates, the earnings per share outlook aligns closely with analyst expectations.
The company’s full-year fiscal 2025 adjusted EBITDA of $719.2 million — representing a 26% year-over-year jump — combined with the record $562 million in free cash flow generation, capped off an exceptionally strong year for the online pet supplies retailer.
