Chewy (CHWY) Q2 2025 earnings summary

Executive summary

• Q2 2024 net sales grew 2.6% year-over-year to $2.86 billion, at the high end of guidance, driven by higher customer spending and increased Autoship subscriptions.

• Net income surged to $299.1 million from $20.2 million a year ago, reflecting a significant $275.7 million tax benefit and margin expansion, with net margin rising to 10.5%.

• Active customers totaled 20 million, with net sales per active customer hitting a record $565, up 6.2% year-over-year.

• Autoship customer sales grew 5.8–6.2% year-over-year, representing 78.4% of net sales, highlighting strong recurring revenue and subscription engagement.

• $533 million was returned to shareholders through share repurchases in the quarter.

Financial highlights

• Gross margin expanded to 29.5%, up 120 basis points year-over-year, with gross profit at $843.8 million.

• Adjusted EBITDA was $144.8–$145 million (5.1% margin), up 64% year-over-year, reflecting operational efficiencies.

• Adjusted net income was $104.8 million, up 62% year-over-year; reported net income was $299.1 million, including a one-time $276 million tax benefit.

• Free cash flow for the quarter was $91–$91.5 million; cash and equivalents totaled $694–$695 million at quarter-end.

• Net sales per active customer (NSPAC) reached $565, up from $532 in Q2 2023.

Outlook and guidance

• Q3 2024 net sales expected between $2.84–$2.86 billion (3–4% year-over-year growth).

• Full-year 2024 net sales outlook maintained at $11.6–$11.8 billion (4–6% year-over-year growth), including a 53rd week.

• Full-year Adjusted EBITDA margin guidance raised to 4.5–4.7%, up 130 basis points year-over-year at the midpoint.

• Capital expenditures expected at 1.5–2% of net sales; free cash flow conversion above 80%.

• Stock-based compensation for 2024 now expected at $305 million, down from $330 million.