Chewy Turns Kibble Into A Strong Quarter

Chewy started Wednesday with a quarter that showed loyal pet owners remain one of the market’s more reliable economic forces. The company finished fiscal 2025 with net sales of $12.60 billion, up 6.2% year over year, while adjusted EBITDA rose 26% to $719.2 million and free cash flow reached a record $562.4 million. Active customers climbed 4.0% to 21.3 million, and net sales per active customer rose to $591. That kind of year-end performance gave shareholders a lot to chew on and reinforced the idea that pet spending remains one of the more resilient corners of consumer demand.

The fourth quarter put a little more purr behind the full-year performance. Fourth-quarter net sales increased 0.5% to $3.26 billion, or 8.1% on a normalized 13-week basis, gross margin widened 90 basis points to 29.4%, net income improved to $39.2 million from $22.8 million, and adjusted EBITDA increased to $162.3 million from $124.5 million. And with Autoship making up 84.0% of fourth-quarter net sales, it's safe to say Chewy was not just filling bowls, it was running a more disciplined operation around every one of them.

The more interesting development may be how much more productive Chewy is becoming. The company added 813,000 active customers in fiscal 2025, executed $257 million of share repurchases during the year, and ended the fourth quarter with a cash balance of $879 million, including cash equivalents and marketable securities. That combo suggests Chewy is becoming a more productive, disciplined business that has what it takes to turn a growing customer base into stronger cash generation and shareholder returns.

Chewy backed up the quarter with an outlook that suggested this was more than just a tidy finish to fiscal 2025. The company guided fiscal 2026 net sales to $13.60 billion to $13.75 billion with adjusted EBITDA margin of 6.6% to 6.8%, and for the first quarter projected net sales of $3.33 billion to $3.36 billion and adjusted diluted EPS of $0.40 to $0.45. That gives investors a clear framework for the next year — more growth, more margin discipline, and another chance for Chewy to show that recurring pet demand can keep translating into stronger earnings and cash flow.

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