Chewy (CHWY) Q2 FY2026 Earnings Call: Sales Rise 7.3%, Guidance Narrowed
Source Tradingkey
Key Takeaways
- Chewy’s Q2 FY2026 net sales rose 7.3% year over year to $3.33 billion, at the high end of company guidance. Organic net sales increased 5.7%, excluding SmartPack and Modern Animal.
- Adjusted EBITDA reached $227 million, with a 6.8% margin versus company guidance of 6.3% to 6.4%. Management said substantially all of the outperformance came from timing-related and discrete benefits.
- Active customers increased 3.8% to 21.7 million. Autoship sales grew 9.3% to $2.8 billion and represented 84.6% of total net sales.
- Chewy narrowed FY2026 organic sales growth guidance to 5.5%–6.3% and raised the low end of adjusted EBITDA margin guidance, taking the range to 6.7%–6.8%.
- Management is not assuming a meaningful consumer recovery for the rest of FY2026. Its outlook instead depends on market-share gains, customer growth, Autoship engagement, health services and operating efficiencies.
- Chewy expects AI initiatives to generate low tens of millions of dollars in FY2026 cost savings and scale to approximately $50 million on an annualized basis in FY2027.
Core Financial Data
| Metric | Q2 FY2026 result | Change or context |
|---|---|---|
| Net sales | $3.33 billion | Up 7.3% year over year |
| Organic net sales | — | Up 5.7%, excluding SmartPack and Modern Animal |
| Active customers | 21.7 million | Up 3.8%; 208,000 sequential net additions |
| Net sales per active customer | $602 | Up 1.9% reported; up 3.8% on a normalized basis |
| Autoship sales | $2.8 billion | Up 9.3%; 84.6% of net sales |
| Gross margin | 30.4% | Flat year over year; up 30 basis points sequentially |
| Adjusted EBITDA | $227 million | Adjusted EBITDA margin of 6.8% |
| Non-GAAP SG&A | $612 million | 18.4% of sales versus 19.1% a year earlier |
| Advertising and marketing | $215 million | 6.5% of sales, essentially flat year over year |
| Adjusted net income | $149 million | Adjusted diluted EPS of $0.36 |
| Free cash flow | $90 million | Versus $106 million a year earlier; management attributed the decline to timing |
| Cash, equivalents and marketable securities | $612 million | More than $1 billion of total available liquidity |
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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