Chewy (CHWY) investor relations material

Executive summary

• Q2 net sales grew 8.6% year-over-year to $3.1 billion, surpassing guidance, driven by strong Autoship sales and a 4.5% increase in active customers to 20.9 million, with net sales per active customer at $591.

• Autoship customer sales reached $2.617 billion, up 14.9–15% year-over-year, now 83% of total sales, reflecting robust subscription engagement.

• Adjusted EBITDA rose 26.5% year-over-year to $183.3 million, with a 5.9% margin, and adjusted net income increased 34.8% to $141.1 million.

• Chewy Plus membership, Chewy Vet Care, and Get Real fresh dog food launches are ramping, driving higher customer engagement and spend.

• Returned $123.6–$152.6 million to shareholders through share repurchases in Q2, with $359.8 million remaining authorized.

Financial highlights

• Gross margin expanded to 30.4%, up 90 basis points year-over-year, with gross profit at $942 million.

• Adjusted EBITDA margin improved to 5.9%, and adjusted diluted EPS was $0.33–$0.35.

• Free cash flow was $105.9–$106 million, with $592 million in cash at quarter end.

• Net income was $62.0 million, down from $299.1 million a year ago due to a prior year tax benefit.

• SG&A (excluding SBC) was $592.8 million, 19.1% of net sales, with advertising/marketing at $200.6 million, 6.5–6.8% of net sales.

Outlook and guidance

• Q3 2025 net sales expected between $3.07–$3.1 billion (7–8% YoY growth); full-year 2025 net sales outlook raised to $12.5–$12.6 billion.

• Full-year adjusted EBITDA margin guidance maintained at 5.4–5.7%, with 75 basis points of margin expansion at midpoint.

• Q3 adjusted diluted EPS expected between $0.28–$0.33.

• CapEx to remain at the low end of 1.5–2% of net sales; 80% of adjusted EBITDA expected to convert to free cash flow.

• Management believes current liquidity and credit facilities are sufficient for at least the next twelve months.