May 27, 2026
Chewy (CHWY) Surges on Q1 Beat
Revenue, Autoship, and margins all came in strong
CHWY was up over 21% — and honestly, the report behind it holds up.
Chewy released fiscal Q1 2025 results on June 11, 2025, covering the quarter ended May 4, 2025. Net sales came in at $3.12 billion — up 8.3% year over year, clearing the high end of the company’s own guidance range. Adjusted EBITDA hit $192.7 million, a nearly $30 million improvement from the same period last year, with adjusted EBITDA margin expanding to 6.2%. Adjusted EPS of $0.35 (diluted) was up $0.04 year over year.
Not a blowout by every metric — gross margin actually slipped 10 basis points to 29.6% — but the profitability trajectory is clearly improving, and the market noticed.
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The Autoship Engine
The part that doesn’t get enough attention: Autoship customer sales reached $2.56 billion in Q1, representing 82.2% of total net sales and growing 14.8% year over year. That’s not a rounding error — it’s the core of Chewy’s business model working exactly as designed. Recurring, subscription-style revenue from loyal pet owners who aren’t really thinking about switching. When that number keeps climbing as a share of total sales, it means the customer base is getting stickier, not just bigger.
Active customers also grew year over year — a metric that had been under pressure in prior quarters.
Worth a slight tangent here: sponsored ads are quietly becoming a meaningful margin driver. Per the company’s own 10-Q filing, sponsored advertising — alongside autoship mix and product category shifts — is listed as the primary contributor to gross margin improvement. That’s a high-margin revenue stream that rarely gets discussed in the same breath as pet food subscriptions. It should.
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On the Buyback
One thing to get right: the $500 million share repurchase program was authorized by Chewy’s board on May 24, 2024 — over a year before this earnings report. It’s an existing program, not a new announcement tied to Q1 FY2025. The stock’s post-earnings surge was driven by the operational results themselves, not a fresh capital return catalyst. That distinction matters when you’re sizing up what actually moved shares.
CEO Sumit Singh pointed to topline growth above guidance, active customer growth, and free cash flow generation as the pillars of the quarter. The full-year picture is building — Q1 through Q3 of fiscal 2025 have each come in above the high end of guidance. Whether that consistency starts to command a higher multiple is the open question heading into the second half.
The pet category keeps proving more resilient than most people expect.