Pet Food Retailer Chewy Clocks Q1 Earnings Beat, Guides For Annual EBITDA Margin Expansion

Chewy Inc. CHWY on Wednesday reported a first-quarter 2025 adjusted earnings of 35 cents per share, up 12.9% year-over-year, beating the consensus of $34 cents and the management guidance of 30-35 cents.

The retailer of pet supplies reported sales of $3.12 billion, up 8.3% year over year, compared to the consensus of $3.08 billion and the management guidance of $3.06 billion-$3.09 billion.

Chewy CEO Sumit Singh stated that the company’s first-quarter sales exceeded the high end of its guidance. He also cited year-over-year growth in active customers, along with positive profitability and free cash flow for the period.

Also Read: Chewy’s Loyalty Engine, $1B Pharmacy Business Have JPMorgan Staying Bullish Before Q1

Autoship customer sales reached $2.56 billion, up 14.8%. Chewy Autoship is a recurring delivery program that allows customers to schedule regular shipments of pet food and supplies.

It offers a discount on the initial order, and ongoing savings on recurring orders. In the quarter, Autoship customer sales represented 82.2% of net sales.

Gross margin saw a modest year-over-year decline of 10 basis points at 29.6%. Net sales per active customer increased by 3.7% to $583.

Adjusted EBITDA increased from $162.9 million to $192.7 million. The adjusted EBITDA margin increased by 50 basis points Y/Y to 6.2%. Chewy reported active customers of 20.756 million, up 3.8% year over year.

For the quarter, Chewy generated $48.7 million in free cash flow. At the end of the first quarter of 2025, Chewy reported $616.4 million in cash and cash equivalents.

For fiscal year 2025, the company expects sales of $12.30 billion-$12.45 billion compared to Wall Street estimate of $12.54 billion. The company expects a 2025 adjusted EBITDA margin of 5.4%-5.7%. Chewy’s fiscal year 2024 adjusted EBITDA margin was 4.8%.

For the second quarter of 2025, Chewy expects sales of $3.06 billion-$3.09 billion compared to the consensus of $3.03 billion.

The company expects second-quarter adjusted earnings of 30-35 cents per share versus a consensus of 31 cents.

Price Action: CHWY stock is trading lower by 11.3% to $40.60 at last check Wednesday.

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