Chewy Q2 2026 Sales Rise 7.3% as Margins Expand
Chewy reports $3.33B in Q2 sales with 90bps margin expansion, driven by Autoship growth and acquisition integration.
Chewy reported second-quarter net sales of $3.33 billion, a 7.3% increase year-over-year, according to data provided by GN markets/earnings. The company’s active customer base grew 3.8% to 21.7 million, while net sales per active customer rose 1.9% to $602. Recurring Autoship orders accounted for 84.6% of total revenue, contributing $2.8 billion in sales and growing 9.3% compared to the prior year.
Profitability improved as adjusted EBITDA margin expanded by 90 basis points to 6.8%. This expansion was supported by $10 million in timing-related tariff refunds and efficiency gains in sponsored advertising. GAAP net income reached $80.5 million, representing a 2.4% net margin, while adjusted diluted earnings per share increased by $0.03 to $0.36.
Operating Leverage Drives Margin Gains
Selling, general, and administrative expenses totaled $612 million on a non-GAAP basis, achieving 70 basis points of leverage through improved fulfillment utilization. Advertising and marketing costs remained steady at $6.5% of net sales, amounting to $215 million. Management attributed the margin improvement to better operational efficiency rather than price increases, noting that fuel costs remain a headwind estimated at mid-single-digit millions for the remainder of the fiscal year.
Strategic Acquisitions Expand Veterinary Platform
Chewy completed the $400 million acquisition of Modern Animal to enhance its veterinary and telehealth capabilities. The company also integrated SmartPak, adding 43,000 customers to its active base. Chewy Vet Care reported triple-digit revenue growth, while the equine segment achieved mid-double-digit sales growth for the seventh consecutive quarter. These verticals are central to the company’s strategy of expanding beyond core pet food into high-growth health services.
Forward Guidance Reflects Stable Growth
For the full fiscal year 2026, Chewy guided revenue to between $13.46 billion and $13.57 billion, implying 6.8% to 7.7% growth. Adjusted EBITDA margin is expected to remain in the 6.7% to 6.8% range. Third-quarter revenue is projected at $3.32 billion to $3.36 billion. The company expects low-tens of millions in AI-driven cost savings in fiscal 2026, scaling to an annualized $50 million in fiscal 2027.
