TLDR
- Q1 revenue of $3.12 billion beat expectations by 1.1%.
- Adjusted EPS of $0.35 topped estimates but GAAP net income missed.
- Shares fell over 12% despite positive top-line results.
- Active customer count rose 3.8% to 20.8 million.
- Full-year guidance reaffirmed; CFO departure planned.
Chewy, Inc. (NYSE: CHWY) released its first-quarter fiscal 2025 results on June 10, 2025, showing mixed performance. The stock dropped sharply by over 12% during early market trading after reporting revenue that surpassed analyst expectations but a GAAP net income figure that fell short.
Q1 2025 Financial Highlights
Chewy posted net sales of $3.12 billion, marking an 8.3% year-over-year increase and exceeding Wall Street’s estimate of $3.08 billion. The company reported adjusted earnings per share (EPS) of $0.35, slightly ahead of the expected $0.34. Adjusted EBITDA reached $192.7 million, also beating projections of $190.7 million.
However, GAAP net income was $62.4 million, or $0.15 per share, below analyst forecasts of $68.9 million or $0.16 per share. The net margin declined to 2.0%, down 30 basis points from the previous year. Gross margin slightly dipped to 29.6%.
Chewy, $CHWY, Q1-25. Results:
🔴 -6.5% Pre-Market📊 Adj. EPS: $0.35 🟢
💰 Revenue: $3.12B 🟢
📈 Net Income: $62.4M
🔎 Strong start to FY25 with customer growth, autoship sales at 82% of total revenue, and continued profitability momentum. pic.twitter.com/nuOBQbJlPZ— EarningsTime (@Earnings_Time) June 11, 2025
Active Customer Base and Autoship Sales
Chewy’s active customer count grew by 3.8% year-over-year to nearly 20.8 million. Autoship sales rose 15% from the prior year to $2.56 billion, representing 82% of total sales. This steady growth reflects customer loyalty and recurring revenue strength.
Cash Flow and Profitability Metrics
Despite revenue growth, cash profitability weakened. Free cash flow came in at $48.7 million, translating to a 1.6% margin, below the two-year average and down from the prior quarter’s 4.8%. This modest cash flow performance raised some concerns among investors regarding future capital return potential.
Market Performance and Outlook
Chewy shares, which had risen 37% year-to-date before the report, dropped after the earnings release. The company reaffirmed its full-year outlook, projecting sales between $12.30 billion and $12.45 billion—a 6% to 7% increase. For Q2 2025, it expects adjusted EPS of $0.30 to $0.35 on sales of $3.06 billion to $3.09 billion, aligning with analyst estimates.
Leadership Transition
CFO David Reeder is set to depart in the coming months to lead a semiconductor firm as CEO. Chewy plans an orderly transition while searching for his successor. CEO Sumit Singh emphasized confidence in the company’s growth trajectory and market share expansion despite this leadership change.
Long-Term Returns Mixed
While Chewy delivered an impressive 83.63% return over the past year, its five-year performance lags, with a 14.68% decline compared to the S&P 500’s 101.35% gain. This disparity highlights the stock’s volatile long-term track record.
