Key Highlights
- Chewy shares climbed approximately 13% following the company’s 2026 revenue forecast of $13.6B–$13.75B, surpassing analyst predictions
- Fourth-quarter revenue reached $3.26 billion, representing an 8.1% increase when accounting for the additional week in the prior-year period
- The customer base expanded 4% to reach 21.3 million active users; average spending per customer increased 2.2% to $591
- The company projects AI-powered operational efficiencies will generate $50M+ in annual savings by 2027, with benefits starting in 2026
- The veterinary care division now operates 18 facilities and represents the company’s fastest-expanding segment by customer spending
Chewy delivered fourth-quarter earnings on Wednesday that aligned with Wall Street projections, but the company’s forward-looking guidance captured investor attention and drove significant stock movement.
The online pet retailer projected fiscal year revenue between $13.6 billion and $13.75 billion. This forecast exceeded the Street’s consensus estimate of $13.58 billion, propelling shares upward by approximately 13% during the trading session, with the stock settling near $26.50.
Fourth-quarter revenue totaled $3.26 billion, reflecting a 0.5% increase on a reported basis and an 8.1% gain after normalizing for the calendar shift that added an extra week to the prior year’s comparison period. This figure met analyst expectations. Gross margin expanded by 90 basis points to reach 29.4%, while adjusted EBITDA increased from $124.5 million to $162.3 million.
Adjusted earnings per share registered at $0.27, falling one cent short of the $0.28 Street consensus. On a GAAP basis, net income totaled $39.2 million, or $0.09 per diluted share, compared to $22.8 million in the year-ago quarter.
The active customer count grew 4% year-over-year to 21.3 million. Average net sales per active customer rose 2.2% to $591. Chief Executive Sumit Singh highlighted that pet parents continue viewing their animals as family members and upgrading to higher-quality products — a behavioral shift the company anticipates will persist.
Chief Financial Officer Chris Deppe clarified that the 2026 guidance assumes no pricing inflation impact. Instead, revenue growth is anticipated to stem from acquiring new customers and increasing wallet share among the existing base.
Artificial Intelligence Driving Operational Efficiency
Chewy has invested in AI capabilities over recent quarters and is now implementing these technologies throughout its operations, touching customer service functions, logistics networks, and distribution facilities.
Singh indicated that AI-enabled optimizations should contribute benefits in the “low tens of millions” during 2026, scaling to approximately $50 million or more in annualized run-rate savings by 2027. The retailer is simultaneously ramping up activities at its advanced fulfillment facility in Houston as part of this comprehensive efficiency initiative.
For the first quarter of 2026, Chewy projected revenue ranging from $3.33 billion to $3.36 billion and adjusted earnings per share between $0.40 and $0.45, figures that generally aligned with analyst forecasts.
Veterinary Services Footprint Expanding
Chewy Vet Care opened 10 additional locations throughout fiscal 2025, expanding its network to 18 veterinary practices. The CVC division currently maintains operations across five states, with ambitions for nationwide coverage.
Singh reported that CVC is delivering results ahead of internal projections regarding customer satisfaction metrics and serving as an effective acquisition channel that deepens relationships with high-lifetime-value customers. Management characterized it as the fastest-expanding business unit measured by net sales per active customer.
The company also finalized its acquisition of SmartEquine, a platform focused on equine health services. This transaction is projected to contribute approximately $80 million in net sales during 2026 — representing less than 1% of consolidated revenue, though it demonstrates strategic diversification beyond conventional companion animals.
Notwithstanding Wednesday’s rally, Chewy stock has declined nearly 20% over the trailing twelve-month period and trades substantially below its 52-week peak of $48.62.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
