Key Highlights
- CHWY shares decline 0.59% to $23.45 following fiscal 2025 earnings release
- Annual revenue reaches $12.6B with notable margin improvements
- Adjusted EBITDA increases while reported net income faces headwinds
- Fourth quarter demonstrates consistent customer demand and profitability gains
- Investors respond with measured caution despite positive operational metrics
Shares of Chewy Inc. (CHWY) concluded trading at $23.45, dropping 0.59% in a session marked by intraday volatility. The stock experienced morning strength before retreating into the final bell. Despite delivering robust fiscal 2025 financials showcasing revenue expansion and margin enhancement, the market’s response remained subdued.
Fiscal 2025 Delivers Revenue Gains and Enhanced Profitability Metrics
Chewy announced fiscal 2025 net sales totaling $12.60 billion, representing a 6.2% increase from the prior year. When adjusted for calendar variations, revenue growth accelerated to 8.3%, demonstrating robust underlying momentum. The pet products retailer sustained this performance through elevated customer engagement and broadened merchandise selection.
The company’s gross margin climbed to 29.8%, representing a 60 basis point improvement versus fiscal 2024. This enhancement stemmed from superior cost management and streamlined operational processes. Chewy successfully elevated its profitability framework throughout its primary business operations.
Adjusted EBITDA advanced to $719.2 million, delivering substantial year-over-year growth. The adjusted EBITDA margin widened to 5.7%, reinforcing enhanced earnings quality. Meanwhile, adjusted net income climbed to $540.5 million, underscoring reliable operational execution.
Bottom-Line Results Present Contrasting Narratives Amid Operational Strength
Chewy disclosed net income of $222.8 million for the full fiscal year, incorporating share-based compensation charges. The net margin registered at 1.8%, contracting by 150 basis points from the previous year. This compression reflected elevated expense levels and continued strategic investments.
Basic earnings per share landed at $0.54, with diluted earnings per share at $0.52. Both metrics represented a $0.39 decrease compared to fiscal 2024. However, adjusted earnings indicators demonstrated meaningful progress, signaling more robust core business fundamentals.
Adjusted diluted earnings per share climbed to $1.27, up $0.23 year over year. This advancement showcased productivity enhancements when accounting for non-recurring items. The adjusted figures offered greater transparency into Chewy’s fundamental operating capabilities.
Fourth Quarter Results Reinforce Positive Trajectory Heading Into Next Fiscal Year
Chewy disclosed fourth quarter net sales of $3.26 billion, up 0.5% from the year-ago period. After normalizing for the 13-week comparison, revenue expansion reached 8.1%, indicating sustained consumer interest. The retailer preserved its growth trajectory despite reporting complexities introduced by calendar timing.
Quarterly gross margin improved to 29.4%, posting a 90 basis point gain year over year. Net income registered $39.2 million, while net margin advanced to 1.2%. These outcomes demonstrated continued operational refinement throughout the period.
Adjusted EBITDA for the quarter increased to $162.3 million, contributing to margin growth of 5.0%. Adjusted net income experienced a modest reduction to $114.8 million, reflecting expense pressures. Chewy concluded fiscal 2025 with more than 21 million active customers alongside robust cash generation.
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