TLDR
- Chewy falls 0.59% to $23.45 despite solid fiscal 2025 performance
- Revenue hits $12.6B as margins expand with improved efficiency
- Adjusted EBITDA climbs while net income faces pressure
- Q4 results show steady demand and continued margin growth
- Market reacts cautiously despite strong customer and cash flow growth
Chewy Inc. (CHWY) shares closed at $23.45, falling 0.59% after a volatile session that saw early gains fade. The stock pulled back into the close despite solid fiscal 2025 financial results. The company reported steady revenue growth and improved margins, yet price action reflected cautious market response.
Chewy Reports Revenue Growth and Margin Expansion
Chewy posted fiscal 2025 net sales of $12.60 billion, rising 6.2% year over year. On a normalized basis, revenue increased 8.3%, showing stronger underlying demand. The company maintained growth through higher customer activity and expanded product offerings.
Gross margin reached 29.8%, improving by 60 basis points compared to the previous year. This expansion reflected better cost control and improved operational efficiency. Chewy strengthened its profitability profile across core business segments.
Adjusted EBITDA rose to $719.2 million, marking a significant increase from the prior year. The adjusted EBITDA margin expanded to 5.7%, supporting improved earnings quality. Additionally, adjusted net income reached $540.5 million, highlighting consistent operating performance.
Profit Trends Show Mixed Signals Despite Strong Operations
Chewy reported net income of $222.8 million for fiscal 2025, including share-based compensation costs. Net margin stood at 1.8%, declining by 150 basis points year over year. This decline reflected higher expenses and ongoing investment strategies.
Basic earnings per share came in at $0.54, while diluted earnings per share reached $0.52. Both figures declined by $0.39 compared to the previous year. Adjusted earnings metrics showed improvement, indicating stronger underlying business performance.
Adjusted diluted earnings per share rose to $1.27, increasing by $0.23 year over year. This growth highlighted efficiency gains after excluding one-time expenses. Adjusted metrics provided a clearer view of Chewy’s operating strength.
Q4 Performance Supports Growth Outlook Into 2026
Chewy reported fourth quarter net sales of $3.26 billion, increasing 0.5% year over year. On a normalized 13-week basis, revenue grew 8.1%, reflecting stable demand. The company maintained growth momentum despite calendar differences affecting reported figures.
Quarterly gross margin reached 29.4%, expanding by 90 basis points from the prior year. Net income totaled $39.2 million, while net margin improved to 1.2%. These results showed steady operational improvements during the quarter.
Adjusted EBITDA for the quarter rose to $162.3 million, supporting margin expansion to 5.0%. Adjusted net income declined slightly to $114.8 million, reflecting cost pressures. Chewy ended the year with over 21 million active customers and strong cash flow generation.
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