Chewy (CHWY) Stock Soars 11% on Blowout Q4 Results and Strong 2026 Outlook

Key Highlights

• Chewy delivered Q4 adjusted earnings of $0.27 per share, surpassing analyst expectations of $0.09 by a substantial $0.18
• Quarterly revenue reached $3.26 billion, representing an 8.1% increase year-over-year on a comparable 13-week basis
• The company’s active customer base expanded 4% to reach 21.3 million, while average customer spending increased 2.2% to $591
• Fiscal 2025 adjusted EBITDA climbed to $719.2 million, marking a 26% increase, alongside a company-record free cash flow of $562 million
• The pet retailer’s 2026 full-year sales outlook of $13.6B–$13.75B exceeded the analyst consensus estimate of $13.58B

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Shares of Chewy (CHWY) surged sharply during Wednesday’s premarket session, jumping as much as 11.3% after the online pet products retailer delivered fourth-quarter results that significantly exceeded Wall Street projections and provided upbeat guidance for the current fiscal year. The stock traded at approximately $24.98 in early premarket activity, representing a gain of roughly 6.5%.

The company disclosed adjusted earnings of $0.27 per share for its fiscal quarter that concluded on February 1. This figure substantially outperformed the Street consensus of $0.09 per share, delivering a beat of $0.18 — representing a significant margin of outperformance.

Quarterly revenue totaled $3.26 billion. While this represents just a 0.5% uptick on an as-reported basis compared to the prior year, the year-over-year comparison is complicated by differing quarter lengths — last year’s comparable period spanned 14 weeks compared to 13 weeks in the current quarter. When adjusted for a consistent 13-week timeframe, revenue actually advanced 8.1%.

Chewy, Inc., CHWY

Profitability metrics showed meaningful improvement during the period. The company’s gross margin widened by 90 basis points to reach 29.4%, while adjusted EBITDA margin strengthened by 120 basis points to 5.0%. Adjusted EBITDA for the quarter registered $162.3 million, representing an increase of $37.8 million versus the comparable year-ago period.

Net income for the quarter stood at $39.2 million, translating to 9 cents per diluted share. This compares favorably to net income of $22.8 million, or 5 cents per share, in the prior-year quarter — representing nearly a doubling of bottom-line profitability.

Annual Performance Metrics

For the complete fiscal year 2025, Chewy generated net sales of $12.60 billion — an 8.3% gain on a normalized 52-week comparison basis. Adjusted EBITDA totaled $719.2 million, climbing $148.7 million year-over-year, with margin expansion of 90 basis points to 5.7%.

The company generated a record $562 million in free cash flow throughout the year. This metric represents a significant achievement that typically captures investor interest.

The active customer count grew 4% to 21.3 million during the fourth quarter. Net sales per active customer advanced 2.2% to $591, demonstrating consistent spending patterns among the company’s existing user base.

Forward Outlook Tops Projections

Looking ahead to fiscal 2026, Chewy issued full-year net sales guidance ranging from $13.6 billion to $13.75 billion. Wall Street analysts had been anticipating $13.58 billion, placing the company’s guidance midpoint modestly above consensus expectations.

For the first quarter specifically, Chewy projected adjusted earnings per share between $0.40 and $0.45 on net sales of $3.33 billion to $3.36 billion. Analyst estimates had centered around $0.41 per share on revenue of $3.36 billion.

While the Q1 revenue guidance midpoint falls marginally below consensus, the company’s EPS guidance aligns with analyst expectations.

Fiscal 2025 adjusted EBITDA of $719.2 million represented a 26% year-over-year increase, while the company’s record free cash flow of $562 million capped off an impressive fiscal year for the pet products retailer.

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