Chewy's Sales Growth Driven by Customer Wins and Rising Free Cash Flow
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 25 2026
0mins
Should l Buy CHWY?
Source: NASDAQ.COM
- Significant Customer Growth: Chewy's adjusted net sales grew by 8.1% year-over-year to $3.26 billion in Q4 of fiscal 2025, adding 813,000 active customers to reach a total of 21.3 million, demonstrating the company's strong appeal in the pet products market.
- Increased Customer Spending: The net sales per active customer rose from $567 in fiscal 2024 to $591, reflecting a heightened willingness among existing customers to spend on the e-commerce platform, further driving revenue growth for the company.
- Improved Profit Margins: Chewy's gross margin increased from 28.5% in the prior-year quarter to 29.4%, while its EBITDA margin improved from 3.8% to 5%, indicating enhanced profitability as the company scales its operations.
- Optimistic Future Outlook: Chewy anticipates net sales growth of approximately 9% to $13.7 billion in fiscal 2026, with an expected rise in adjusted EBITDA margin to 6.7%, partly driven by AI-powered productivity gains, projected to yield tens of millions in cost efficiencies.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy CHWY?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on CHWY
Wall Street analysts forecast CHWY stock price to rise
20 Analyst Rating
17 Buy
3 Hold
0 Sell
Strong Buy
Current: 26.620
Low
42.00
Averages
47.06
High
52.00
Current: 26.620
Low
42.00
Averages
47.06
High
52.00
About CHWY
Chewy, Inc. is an e-commerce business geared toward pet products and services. The Company’s products consist of pet food and treats, pet supplies and pet medications, other pet-health products, and pet services. It serves its customers through its retail websites, and its mobile applications and focuses on delivering customer service, competitive prices, convenience, including Chewy’s Autoship subscription program, and a range of pet food, treats and supplies, and pet healthcare products and services. It partners with approximately 3,200 of the brands in the pet industry, and it creates and offers its own private brands. It owns a number of trademark registrations and applications in the United States and in foreign jurisdictions. These trademarks include American Journey, Blue Box Event, Careplus, Chewy, Chewy.com, Chewy Vet Care, Dr. Lyon’s, Frisco, Goody Box, Onguard, PetMD, PracticeHub, Tiny Tiger, True Acre Farms, Tylee’s, Vibeful, and The Zoo.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Chewy Expands Market and Margins
- Revenue Growth Outlook: Chewy anticipates revenue growth to rise from 8.3% in 2025 to 8.5% in 2026, indicating strong momentum in market expansion and reinforcing its competitive position in the e-commerce sector.
- EBITDA Margin Expansion: Management expects EBITDA margins to increase from 5.7% to between 6.6% and 6.8%, with long-term projections exceeding 10%, reflecting effective execution in reducing operating costs and introducing higher-margin products.
- Vet Care Clinics Expansion: Chewy added 10 Vet Care clinics in 2025, bringing the total to 18, which not only enhances customer loyalty but also drives sales through its pet pharmacy and insurance offerings, attracting more customers.
- Autoship Business Growth: Chewy's Autoship business accounted for 84% of net sales in Q4, up from 80.6% at the end of 2024, improving inventory management predictability while reducing overall shipping costs, thereby enhancing operating margins.
See More
Chewy's Rosy 2026 Outlook Drives 12% Stock Surge
- Earnings Beat: Chewy achieved an 8.3% revenue growth in 2025 and anticipates an 8.5% growth midpoint for 2026, indicating strong performance in the pet care market that attracts long-term investors.
- EBITDA Margin Expansion: Management expects EBITDA margins to rise from 5.7% to between 6.6% and 6.8%, with a long-term goal of exceeding 10%, significantly enhancing profitability and competitive positioning.
- New Business Development: Chewy added 10 new Vet Care clinics in 2025, bringing the total to 18, which, along with its pharmacy and insurance offerings, enhances customer loyalty and drives sales growth.
- Private Label Investment: Following the successful launch of its
See More
Chewy's Stock Soars 12% on Positive 2026 Outlook Following Q4 Earnings
- Positive Earnings Outlook: Chewy's fourth-quarter earnings report released at the end of March projected an 8.5% revenue growth for 2026, leading to a 12% stock price increase, reflecting strong market performance and investor confidence.
- EBITDA Margin Expansion: Management anticipates EBITDA margins will rise from 5.7% to between 6.6% and 6.8% in 2026, with long-term goals exceeding 10%, indicating effective execution in cost control and product innovation.
- New Business Initiatives: Chewy added 10 new Vet Care clinics in 2025, bringing the total to 18, which, along with its pet insurance offerings, enhances customer loyalty and drives brand traffic, further solidifying its market position.
- Private Label Growth: Following the successful launch of its
See More
Analysis of Chewy's Growth Potential
- Earnings Growth Outlook: Chewy's historical EPS growth rate stands at an impressive 97.7%, with projected EPS growth of 27.6% this year, significantly surpassing the industry average of 21.7%, indicating strong future profitability that attracts investor interest.
- Cash Flow Growth Advantage: The company boasts a year-over-year cash flow growth rate of 57.4%, well above the industry average of -7.8%, enabling Chewy to expand its operations without relying on costly external funding, thereby enhancing its market competitiveness.
- Earnings Estimate Revision Trend: Chewy has seen a 9.1% upward revision in current-year earnings estimates over the past month, reflecting increased market confidence in its future performance and solidifying its Zacks Rank of #2.
- Investor Focus: With Chewy's A-rated Growth Score and robust earnings outlook, investors may consider increasing their positions in the stock at this time, aiming for potential outperformance in the future.
See More
Chewy's Continued Growth: Autoship as the Sales Engine
- Customer Loyalty Growth: Chewy's customer-centric operations have successfully attracted a loyal consumer base, benefiting from a 9% annual growth in the U.S. pet industry since 2018, showcasing significant market potential.
- Autoship Program Success: Chewy's Autoship subscription program is projected to account for 83% of sales by 2025, becoming the company's 'sales engine,' with profitability increasing through its distribution network, driving gross margins from 20% in 2019 to 29% today.
- EBITDA Margin Improvement: Chewy's EBITDA margin has surged from -7% in 2019 to 3%, with management forecasting it to reach 10% in the future, indicating a substantial enhancement in profitability and increasing investment appeal.
- New High-Margin Growth Areas: Chewy is expanding into high-margin growth areas such as Chewy Vet Care clinics and advertising, which are expected to generate higher revenues and profits, further solidifying its market position.
See More
Three Stocks to Buy and Hold for the Next Decade
- Carvana Growth Potential: Carvana sold nearly 600,000 vehicles in 2024, a 43% increase, and despite its small market share, it is expected to benefit from the growing trend of online car purchases, driving revenue growth and record profits in the coming years.
- Chewy's Market Strategy: Chewy's quarterly revenue reached $3.26 billion, with 84% coming from 'autoship' customers, showcasing its competitive edge in the pet supply e-commerce sector, and it is likely to continue attracting consumers seeking convenience.
- SoFi Customer Growth: As of last year, SoFi Technologies served 13.7 million unique customers, a 35% year-over-year increase, and in the increasingly digital banking landscape in the U.S., SoFi meets consumer demand for convenience, positioning itself for strong growth ahead.
- Online Shopping Trend: With more consumers shifting to online shopping, companies like Carvana, Chewy, and SoFi are at the forefront of industry transformation, poised for sustained business expansion and market share growth over the next decade.
See More
Chewy Expands Market and Margins
- Revenue Growth Outlook: Chewy anticipates revenue growth to rise from 8.3% in 2025 to 8.5% in 2026, indicating strong momentum in market expansion and reinforcing its competitive position in the e-commerce sector.
- EBITDA Margin Expansion: Management expects EBITDA margins to increase from 5.7% to between 6.6% and 6.8%, with long-term projections exceeding 10%, reflecting effective execution in reducing operating costs and introducing higher-margin products.
- Vet Care Clinics Expansion: Chewy added 10 Vet Care clinics in 2025, bringing the total to 18, which not only enhances customer loyalty but also drives sales through its pet pharmacy and insurance offerings, attracting more customers.
- Autoship Business Growth: Chewy's Autoship business accounted for 84% of net sales in Q4, up from 80.6% at the end of 2024, improving inventory management predictability while reducing overall shipping costs, thereby enhancing operating margins.
See More
Chewy's Rosy 2026 Outlook Drives 12% Stock Surge
- Earnings Beat: Chewy achieved an 8.3% revenue growth in 2025 and anticipates an 8.5% growth midpoint for 2026, indicating strong performance in the pet care market that attracts long-term investors.
- EBITDA Margin Expansion: Management expects EBITDA margins to rise from 5.7% to between 6.6% and 6.8%, with a long-term goal of exceeding 10%, significantly enhancing profitability and competitive positioning.
- New Business Development: Chewy added 10 new Vet Care clinics in 2025, bringing the total to 18, which, along with its pharmacy and insurance offerings, enhances customer loyalty and drives sales growth.
- Private Label Investment: Following the successful launch of its
See More
Chewy's Stock Soars 12% on Positive 2026 Outlook Following Q4 Earnings
- Positive Earnings Outlook: Chewy's fourth-quarter earnings report released at the end of March projected an 8.5% revenue growth for 2026, leading to a 12% stock price increase, reflecting strong market performance and investor confidence.
- EBITDA Margin Expansion: Management anticipates EBITDA margins will rise from 5.7% to between 6.6% and 6.8% in 2026, with long-term goals exceeding 10%, indicating effective execution in cost control and product innovation.
- New Business Initiatives: Chewy added 10 new Vet Care clinics in 2025, bringing the total to 18, which, along with its pet insurance offerings, enhances customer loyalty and drives brand traffic, further solidifying its market position.
- Private Label Growth: Following the successful launch of its
See More
Analysis of Chewy's Growth Potential
- Earnings Growth Outlook: Chewy's historical EPS growth rate stands at an impressive 97.7%, with projected EPS growth of 27.6% this year, significantly surpassing the industry average of 21.7%, indicating strong future profitability that attracts investor interest.
- Cash Flow Growth Advantage: The company boasts a year-over-year cash flow growth rate of 57.4%, well above the industry average of -7.8%, enabling Chewy to expand its operations without relying on costly external funding, thereby enhancing its market competitiveness.
- Earnings Estimate Revision Trend: Chewy has seen a 9.1% upward revision in current-year earnings estimates over the past month, reflecting increased market confidence in its future performance and solidifying its Zacks Rank of #2.
- Investor Focus: With Chewy's A-rated Growth Score and robust earnings outlook, investors may consider increasing their positions in the stock at this time, aiming for potential outperformance in the future.
See More
Chewy's Continued Growth: Autoship as the Sales Engine
- Customer Loyalty Growth: Chewy's customer-centric operations have successfully attracted a loyal consumer base, benefiting from a 9% annual growth in the U.S. pet industry since 2018, showcasing significant market potential.
- Autoship Program Success: Chewy's Autoship subscription program is projected to account for 83% of sales by 2025, becoming the company's 'sales engine,' with profitability increasing through its distribution network, driving gross margins from 20% in 2019 to 29% today.
- EBITDA Margin Improvement: Chewy's EBITDA margin has surged from -7% in 2019 to 3%, with management forecasting it to reach 10% in the future, indicating a substantial enhancement in profitability and increasing investment appeal.
- New High-Margin Growth Areas: Chewy is expanding into high-margin growth areas such as Chewy Vet Care clinics and advertising, which are expected to generate higher revenues and profits, further solidifying its market position.
See More
Three Stocks to Buy and Hold for the Next Decade
- Carvana Growth Potential: Carvana sold nearly 600,000 vehicles in 2024, a 43% increase, and despite its small market share, it is expected to benefit from the growing trend of online car purchases, driving revenue growth and record profits in the coming years.
- Chewy's Market Strategy: Chewy's quarterly revenue reached $3.26 billion, with 84% coming from 'autoship' customers, showcasing its competitive edge in the pet supply e-commerce sector, and it is likely to continue attracting consumers seeking convenience.
- SoFi Customer Growth: As of last year, SoFi Technologies served 13.7 million unique customers, a 35% year-over-year increase, and in the increasingly digital banking landscape in the U.S., SoFi meets consumer demand for convenience, positioning itself for strong growth ahead.
- Online Shopping Trend: With more consumers shifting to online shopping, companies like Carvana, Chewy, and SoFi are at the forefront of industry transformation, poised for sustained business expansion and market share growth over the next decade.
See More
