Key Points Chewy's stock dropped due to conservative guidance. However, the online pet goods retailer is firing on all cylinders, operationally. Chewy's focus on numerous higher-margin business ideas could boost profits. 10 stocks we like better than Chewy › Shares of leading online pet goods retailer Chewy (NYSE: CHWY) are down 15% this week as of 1 p.m. ET on Thursday, according to data provided by S&P Global Market Intelligence. Chewy reported second-quarter earnings on Wednesday, delivering a ...

Chewy (NYSE:CHWY) Q2 2026 Earnings Call September 10, 2025 08:00 AM ET Company ParticipantsRupesh Parikh - MDDavid Bellinger - DirectorWill Billings - CAO and IPFONathan Feather - Equity Research AssociateNatalie Nowak - Director of IRSumit Singh - CEOShweta Khajuria - MDDoug Anmuth - MDConference Call ParticipantsMichael Morton - Senior Research AnalystDylan Carden - Research AnalystOperatorHello everyone, and welcome to the Chewy Second Quarter 2025 Earnings Call. My name is Emily, and I'll be coordinatin ...

Chewy (NYSE:CHWY) Q2 2026 Earnings Call September 10, 2025 08:00 AM ET Company ParticipantsNatalie Nowak - Head - IRSumit Singh - CEO & DirectorWill Billings - Chief Accounting Officer & Interim Principal Financial OfficerNathan Feather - Equity Research AssociateShweta Khajuria - MD - Global InternetConference Call ParticipantsDouglas Anmuth - MD & Internet AnalystDavid Bellinger - Director & Senior AnalystRupesh Parikh - MD & Senior Analyst - Food, Grocery & Consumer ProductsMichael Morton - Senior Resear ...

Chewy (NYSE:CHWY) Q2 2026 Earnings Call September 10, 2025 08:00 AM ET Company ParticipantsRupesh Parikh - MDDavid Bellinger - DirectorWill Billings - CAO and IPFONathan Feather - Equity Research AssociateNatalie Nowak - Director of IRSumit Singh - CEOShweta Khajuria - MDDoug Anmuth - MDConference Call ParticipantsMichael Morton - Senior Research AnalystDylan Carden - Research AnalystOperatorHello everyone, and welcome to the Chewy second quarter 2025 earnings call. My name is Emily, and I'll be coordinatin ...

Financial Data and Key Metrics Changes - Q2 net sales grew by nearly 9% year over year to $3.1 billion, exceeding the high end of guidance range [5][17] - Gross margin reached 30.4%, expanding by nearly 80 and 90 basis points sequentially and year-over-year, respectively [6][17] - Adjusted net income for Q2 was $141.1 million, representing a 34.8% increase year over year [18] - Free cash flow for Q2 was nearly $106 million, with a robust liquidity position of approximately $1.4 billion [7][20] Business Line Data and Key Metrics Changes - Autoship customer sales reached $2.58 billion, representing 83% of Q2 net sales and a nearly 15% increase [5][6] - Hardgoods business grew over 15% in Q2, driven by structural volume growth [5] - Chewy Plus program showed strong growth, with approximately 3% of total monthly sales attributed to members [9][10] Market Data and Key Metrics Changes - Active customers increased to 20.9 million, reflecting a 4.5% year-over-year growth [6] - NESPAC (Net Effective Sales Per Active Customer) reached $591, representing a 4.6% year-over-year growth [6] - The overall industry growth is in the low to mid-single digits, while Chewy is growing at a 7% to 8% rate [61] Company Strategy and Development Direction - Chewy is focusing on expanding its Chewy Plus membership and private brands, with a new product line "Get Real" launched in August [10][12] - The company plans to open 8 to 10 new Chewy Vet Care practices in fiscal year 2025 [8] - Chewy aims to mitigate tariff-related costs and invest in growth initiatives to enhance market share [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in Chewy's ability to navigate macroeconomic pressures and continue gaining market share [15][21] - The second half of 2025 is expected to be dynamic, with plans to invest in growth while maintaining profitability [15][21] - Management anticipates continued gross margin expansion and a strong performance from the Chewy Plus program [21][22] Other Important Information - The company repurchased approximately 3 million shares for about $125 million in Q2 [19] - Chewy remains debt-free with a strong cash position, allowing for strategic investments [20] Q&A Session All Questions and Answers Question: Can you talk more about the investments required in the back half and into 2026? - Management indicated that investments will focus on enhancing customer discoverability and increasing awareness of new offerings like Chewy Plus and Get Real, primarily through existing customer engagement rather than external marketing [25][26] Question: How should we think about the leverage path into the back half? - Management expects SG&A leverage to improve in the back half of the year, driven by the ramp-up of fulfillment centers and structural growth [34][39] Question: Can you unpack the Q2 gross margin improvement and the drivers for Q3 and Q4? - Management noted that gross margin expansion is driven by product mix, increasing Autoship penetration, and a rational promotional environment, with expectations for continued growth [42][44] Question: How big do you think the fresh and frozen business can go over time? - Management estimates the total addressable market for the fresh and frozen category to grow from $3 billion to $4 billion currently to between $8 billion and $12 billion in the coming years [51][52] Question: What are your expectations regarding the advertising environment? - Management reported high competitive intensity in the advertising market but noted strong metrics in net traffic and mobile app engagement [57][62] Question: What are the competitive advantages Chewy has over retail giants? - Management emphasized Chewy's unique value proposition that combines e-commerce efficiency with personalized service, allowing for a strong position in the pet care market [67][70]