Key Takeaways
- CHWY shares climbed approximately 13% following 2026 revenue projections of $13.6B–$13.75B, surpassing Wall Street expectations
- Fourth-quarter revenue reached $3.26 billion, representing an 8.1% increase when accounting for the additional week in the prior year’s quarter
- The customer base expanded 4% to reach 21.3 million active users; average spending per customer increased 2.2% to $591
- The company anticipates AI-powered operational efficiencies will generate $50M+ in annual savings by 2027, with initial benefits in the low tens of millions expected throughout 2026
- The veterinary care division has expanded to 18 facilities and represents the company’s fastest-growing category measured by customer spending
Chewy delivered fourth-quarter financial results on Wednesday that aligned with market expectations, while the company’s forward-looking 2026 projections captured significant investor attention.
The online pet retailer projected annual revenue between $13.6 billion and $13.75 billion for the full year. This guidance exceeded the analyst consensus estimate of $13.58 billion, propelling shares upward by approximately 13% during Wednesday’s trading session, with the stock settling near $26.50 at market close.
Fourth-quarter revenue totaled $3.26 billion, reflecting a 0.5% increase on a reported basis and an 8.1% gain after adjusting for the extra week included in the previous year’s comparison period. These figures met analyst projections. The company’s gross margin expanded by 90 basis points to reach 29.4%, while adjusted EBITDA climbed from $124.5 million to $162.3 million.
Adjusted earnings per share stood at $0.27, one cent shy of the $0.28 consensus forecast. GAAP net income totaled $39.2 million, translating to $0.09 per share, compared with $22.8 million in the year-ago period.
The active customer count increased 4% year-over-year to 21.3 million. Average revenue per active customer rose 2.2% to $591. CEO Sumit Singh highlighted that pet owners continue embracing premium product offerings, viewing their animals as integral family members—a behavioral shift he anticipates will persist.
CFO Chris Deppe clarified that the 2026 guidance assumes no price inflation impact. The projected growth stems from attracting new customers while simultaneously increasing spending among the existing customer base.
Artificial Intelligence Driving Operational Gains
Chewy has invested in AI infrastructure development throughout recent quarters and has begun implementing these technologies across multiple operational areas, including customer service operations, supply chain management, and distribution networks.
Singh indicated that AI-enabled operational improvements should contribute benefits in the low tens of millions during 2026, scaling to approximately $50 million or greater in annualized savings by 2027. The company continues expanding operations at its advanced fulfillment facility in Houston, which forms part of this comprehensive cost-optimization initiative.
Looking toward the first quarter of 2026, Chewy provided guidance calling for revenue between $3.33 billion and $3.36 billion, with adjusted EPS ranging from $0.40 to $0.45, figures that generally aligned with analyst forecasts.
Veterinary Services Footprint Growing
Chewy Vet Care introduced 10 additional locations throughout fiscal 2025, elevating the total practice count to 18. CVC currently maintains operations across five states, with ambitions for nationwide expansion.
Singh reported that CVC performance has surpassed internal projections regarding customer satisfaction metrics and serves as an effective customer acquisition channel that deepens relationships with high-value consumers. The division has emerged as the fastest-expanding segment when measured by revenue per active customer.
The company also finalized its acquisition of SmartEquine, a specialized equine health platform. This transaction is projected to contribute approximately $80 million in net sales during 2026—representing under 1% of total revenue—while signaling strategic diversification beyond conventional household companion animals.
Following Wednesday’s rally, CHWY shares have declined nearly 20% over the trailing twelve-month period and continue trading substantially below the 52-week peak of $48.62.
