Chewy Q2 Earnings Rise, Raises 2026 Sales Outlook

Chewy, Inc. on Sept. 9, 2026 reported stronger second-quarter results and raised its fiscal 2026 net-sales guidance, citing resilient Autoship demand and margin gains from operating efficiencies. The company also signaled continued share repurchases alongside selective acquisitions.

Q2 Results and Profitability

For the 13 weeks ended Aug. 2, 2026, Chewy reported net sales of $3.33 billion, up 7.3% year over year. Adjusted EBITDA rose about 24% to approximately $227 million, producing a 6.8% margin, 90 basis points higher than a year earlier. Net income increased to $80.5 million, lifting the net margin to 2.4%. GAAP diluted earnings per share (EPS) were $0.20, while adjusted diluted EPS was $0.36, in line with Street expectations. Operating income grew roughly 32% to $92 million. Year-to-date net income for the 26-week period reached about $175 million, with a net margin near 2.6%. These results were disclosed in a press release and detailed in the company’s Form 10-Q filing.

Customers, Autoship and Sales Mix

Active customers totaled 21.7 million, a 3.8% increase from the prior year, with 208,000 net additions during the quarter. Autoship subscription sales rose 9.3% to about $2.8 billion, accounting for 84.6% of total net sales. Net sales per active customer increased 1.9% reported and roughly 3.8% on a normalized basis, reaching $602. Organic net sales, excluding the SmartPak and Modern Animal acquisitions, grew about 5.7% year over year. Management attributed gains to higher traffic, improved retention, and increased spending per customer.

Guidance, Cash Flow and Capital Allocation

Chewy raised its fiscal 2026 net-sales guidance to approximately $13.46 billion–$13.57 billion, implying year-over-year growth of about 6.8%–7.7%, including organic growth of roughly 5.5%–6.3% excluding recent acquisitions. The adjusted EBITDA margin of 6.8% exceeded prior guidance of 6.3%–6.4%, driven mainly by operating expense discipline and some favorable timing effects that may not fully repeat. Management noted ongoing pressure on discretionary pet spending, while consumables, medical categories, and recurring Autoship demand remained more resilient.

Operating cash flow for the quarter was about $137 million, while free cash flow declined 15.5% year over year to roughly $90 million, largely due to higher capital expenditures. The company returned approximately $200 million to shareholders through share repurchases and made acquisition-related payments for SmartPak and Modern Animal, which reduced cash balances and modestly increased leverage. Management said it will continue investing in growth and acquisitions while balancing repurchases, capital expenditures, and liquidity.

Chewy’s modest revenue beat, raised sales outlook, and ongoing buybacks indicate management’s confidence in the core Autoship-driven business, despite the trade-offs reflected in weaker free cash flow.