Chewy Reports Fiscal Q4 and Full-Year 2025 Results, Highlighting Strong Profitability and Cash Flow Growth
Chewy, one of the most recognized online destinations for pet parents across the United States, has officially released its financial performance results for the fiscal fourth quarter and full fiscal year 2025, which ended on February 1, 2026. The company’s latest update reflects steady sales growth, expanding margins, rising profitability metrics, and record free cash flow generation as Chewy continues strengthening its position in the fast-growing pet e-commerce and pet health markets.
The company also clarified that its fiscal quarter and year ended February 1, 2026 consisted of 13 weeks and 52 weeks, respectively. By comparison, the fiscal quarter and year ended February 2, 2025 consisted of 14 weeks and 53 weeks, respectively. Due to this difference in reporting periods, Chewy provided both reported and normalized comparisons to better illustrate year-over-year performance.
Chewy’s leadership emphasized that the business ended fiscal 2025 with solid momentum and believes it is positioned for continued profitable expansion moving into 2026 and beyond.
Fiscal 2025 Performance Shows Consistent Growth and Margin Expansion
For the full fiscal year 2025, Chewy delivered net sales of $12.60 billion, representing a 6.2% increase compared with the prior year. When adjusting for the difference in fiscal weeks and normalizing the period to a 52-week basis, net sales growth rises to 8.3%, reinforcing that the company’s demand trends remained healthy throughout the year.
This growth reflects Chewy’s ability to retain loyal customers, expand product categories, and maintain strong order frequency among active users. It also demonstrates the resilience of the company’s business model even as the retail landscape continues to shift and consumers become increasingly value-conscious.
In addition to higher sales, Chewy delivered notable improvement in profitability at the gross profit level. The company posted a gross margin of 29.8%, which expanded by 60 basis points year over year. This margin improvement suggests better cost efficiency, stronger pricing discipline, and improved operational leverage, particularly in fulfillment and logistics.
Chewy’s gross margin progress is especially important because it reflects the company’s ability to manage shipping expenses, optimize inventory planning, and strengthen its supply chain operations while still delivering competitive pricing for pet owners.
Net Income and Earnings Reflect GAAP Pressure but Underlying Strength
Chewy reported net income of $222.8 million for fiscal 2025. This figure included share-based compensation expense and related taxes totaling $311.2 million, which significantly impacted the company’s GAAP earnings performance.
Chewy’s net margin came in at 1.8%, representing a contraction of 150 basis points year over year. While this decline may appear concerning on the surface, it largely reflects the impact of accounting items and expense structure changes rather than weakening demand.
On a per-share basis, Chewy reported basic earnings per share (EPS) of $0.54, down by $0.39 compared with the prior year. Diluted EPS was $0.52, also reflecting a decline of $0.39 year over year.
Despite the GAAP decline in earnings per share, Chewy highlighted that adjusted performance indicators improved meaningfully, signaling that the underlying business continued to generate stronger cash flow and operating leverage.
Adjusted EBITDA Growth Signals Stronger Operating Efficiency
One of the most important highlights in Chewy’s fiscal year performance was the improvement in adjusted profitability. Chewy reported Adjusted EBITDA of $719.2 million, representing an increase of $148.7 million year over year.
This is a major indicator of improving operating efficiency and reflects Chewy’s success in controlling expenses while continuing to invest in growth opportunities.
Adjusted EBITDA margin expanded to 5.7%, increasing by 90 basis points year over year. This margin expansion shows that Chewy is achieving stronger scale benefits and leveraging its infrastructure, including its fulfillment network, technology systems, and customer service model.
The company also delivered adjusted net income of $540.5 million, which increased by $93.7 million year over year.
Adjusted earnings per share also improved notably, with adjusted basic EPS of $1.31, rising by $0.25 year over year, and adjusted diluted EPS of $1.27, increasing by $0.23 year over year.
These gains indicate that while GAAP results were pressured by accounting-related expenses, the company’s core profitability and earnings power continued strengthening.
Fiscal Q4 2025 Sales Growth Strengthens When Normalized
For the fiscal fourth quarter of 2025, Chewy posted net sales of $3.26 billion, representing a 0.5% year-over-year increase on a reported basis. However, when normalized for the 13-week quarter compared with the prior-year 14-week quarter, net sales growth improves substantially to 8.1%.
This normalized comparison highlights that the lower reported growth rate was largely due to calendar differences rather than a slowdown in customer demand.
Chewy’s Q4 performance suggests that pet spending remained steady and that customers continued using Chewy’s platform for recurring purchases, essential pet supplies, and health-related products.
Fourth Quarter Margin Expansion Demonstrates Continued Improvement
Chewy continued improving its gross profitability in the fourth quarter. The company reported a gross margin of 29.4%, expanding by 90 basis points year over year.
This strong margin improvement in Q4 indicates that Chewy’s operational initiatives, such as logistics optimization and supplier relationships, continue delivering tangible results.
Margin gains in e-commerce are particularly meaningful because shipping and fulfillment costs often limit profitability. Chewy’s ability to expand gross margin reflects progress in efficiency and improved unit economics across its product portfolio.
Net Income Improves in Q4 as Profitability Strengthens
During the fourth quarter, Chewy generated net income of $39.2 million, including share-based compensation expense and related taxes of $77.6 million.
The company posted a net margin of 1.2%, representing a 50 basis point expansion year over year. This quarter-over-quarter improvement indicates that Chewy is moving in the right direction on profitability despite ongoing investment needs.
Chewy’s reported basic EPS was $0.09, an increase of $0.03 year over year, while diluted EPS was $0.09, rising by $0.04 year over year.
This improvement shows that the company is not only expanding margins but also translating those gains into shareholder value through higher earnings performance.
Adjusted EBITDA Growth Accelerates in the Fourth Quarter
Chewy also delivered strong growth in adjusted profitability during the quarter. Adjusted EBITDA reached $162.3 million, increasing by $37.8 million year over year.
Adjusted EBITDA margin for Q4 rose to 5.0%, expanding by 120 basis points year over year. This improvement suggests that Chewy’s scale-driven cost efficiencies are accelerating and that the company is gaining more control over operating costs.
However, adjusted net income for Q4 came in at $114.8 million, showing a decline of $5.2 million year over year. This slight decrease reflects fluctuations in cost structure and accounting adjustments that can vary quarter to quarter.
Adjusted basic EPS was $0.28, down slightly by $0.01, while adjusted diluted EPS was $0.27, also down by $0.01.
Although adjusted EPS declined marginally, Chewy’s profitability improvements in EBITDA and margin suggest continued progress toward sustainable earnings expansion.
CEO Highlights Customer Growth, Free Cash Flow Record, and Confidence for 2026
Chewy Chief Executive Officer Sumit Singh emphasized that the company closed fiscal 2025 in a strong position, supported by both financial growth and a growing customer base.
According to Singh, Chewy ended the year with $12.6 billion in net sales, which equates to 8.3% growth on a normalized basis, along with $719 million in adjusted EBITDA, reflecting 26% year-over-year growth.
One of the most notable highlights was Chewy’s record free cash flow of $562 million, a major milestone that demonstrates the company’s improving cash generation capabilities. Free cash flow is often viewed as one of the strongest indicators of financial health, especially for e-commerce companies that require significant investment in infrastructure and fulfillment operations.
Chewy also reported that it ended the year with 21.3 million active customers, reflecting the platform’s continued relevance and loyalty among pet owners.
Singh stated that the company’s performance reinforces the durability of the Chewy model and provides confidence that the business can deliver profitable growth, expanding margins, and strong cash generation throughout fiscal 2026 and beyond.
Chewy’s Business Model Continues to Show Long-Term Strength
Chewy’s fiscal 2025 performance confirms that the company is evolving beyond being simply an online pet supply retailer. The business has increasingly positioned itself as a complete pet care ecosystem, supporting pet parents with food, treats, toys, medications, wellness products, and personalized customer support.
Its recurring revenue model, supported by subscription-style autoship programs, remains one of its greatest strengths. Chewy continues benefiting from predictable reorder behavior in categories such as pet food, litter, and health essentials.
The improvement in adjusted EBITDA and free cash flow suggests that Chewy is also becoming more disciplined in balancing growth with profitability. As competition in online retail remains intense, Chewy’s ability to expand margins while growing revenue reflects strong execution and operational maturity.
Suggests Momentum Carrying Into Fiscal 2026
With expanding gross margin, higher adjusted profitability, record free cash flow, and a strong active customer base, Chewy enters fiscal 2026 positioned for continued growth.
The company’s leadership appears confident that its long-term strategy will continue delivering results, especially as more pet owners prioritize convenience, subscription-based shopping, and digital access to pet healthcare products.
Chewy’s fiscal 2025 results reflect a company that is improving its financial structure while maintaining customer loyalty and scaling its platform efficiently. The combination of revenue growth and margin expansion suggests Chewy is strengthening its role as a dominant player in the pet retail market, with a clear pathway toward sustained profitable performance.
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