Chewy (CHWY) Q2 2027 earnings summary

Executive summary

• Net sales for Q2 reached $3.33 billion, up 7.3% year-over-year, at the high end of guidance, driven by growth in active customers and higher net sales per active customer.

• Net income rose 29.8% year-over-year to $80.5 million, with net margin improving to 2.4%.

• Adjusted EBITDA was $226.7 million (6.8% margin), up 23.7% year-over-year, exceeding guidance.

• Active customers grew 3.8% year-over-year to 21.7 million, with net sales per active customer reaching $602.

• Autoship customer sales increased 9.3% year-over-year, now representing 84.6% of net sales.

Financial highlights

• Gross margin held steady at 30.4% year-over-year, with gross profit of $1.01 billion.

• Adjusted net income was $148.8 million, up 5.5% year-over-year; diluted EPS increased to $0.20.

• Free cash flow for the quarter was $89.5 million, with cash and cash equivalents at $611.0 million at quarter-end.

• Operating income rose 32% to $92.0 million, with an operating margin of 2.8%.

• Net margin improved by 40 basis points to 2.4% year-over-year.

Outlook and guidance

• FY2026 net sales expected at $13.46–$13.57 billion (6.8–7.7% growth), with organic growth of 5.5–6.3%.

• Adjusted EBITDA margin guidance raised to 6.7–6.8%, implying over 100 bps year-over-year expansion.

• Q3 net sales expected at $3.323–$3.358 billion (6.6–7.7% growth), with adjusted EBITDA margin of 6.6–6.7%.

• Management expects continued growth in active customers and net sales per active customer, supported by expanded healthcare and specialty offerings.

• No meaningful consumer recovery assumed in guidance; outlook based on stable trends and continued share gains.