Chewy Q2 2026 earnings: profit beats estimates, guidance raised despite soft pet market
Chewy topped profit expectations and raised its full-year outlook, even as the broader pet market stayed sluggish.
| Q2 2026 | Reported | Expected | Surprise |
|---|---|---|---|
| EPS | $0.36 | $0.18 | +96.7% |
| Revenue | $3.33B | $3.39B | -1.7% |
Key takeaways
- Chewy’s adjusted profit came in well above what Wall Street had penciled in, a much bigger beat than the small revenue shortfall against analyst estimates would suggest — revenue was still up about 7% from a year ago and landed at the high end of the range Chewy itself had guided to.
- Growth is coming from existing customers spending more, not just new sign-ups: active customers rose 3.8% to 21.7 million, while ‘Autoship’ — Chewy’s recurring, subscribe-and-save orders — grew faster than total sales and now makes up nearly 85% of everything Chewy sells, a sign that repeat, predictable purchases are the engine of the business.
- The TTM margin figures show a company still thin on profit in absolute terms but improving: gross margin near 30% means Chewy keeps about 30 cents of every dollar after covering the cost of the products it sells, while operating and net margins near 2% show most of that gets eaten up by shipping, marketing, and overhead before much reaches the bottom line — though management pointed to fulfillment efficiency and automation as steadily widening that gap.
- Return on equity of 57% looks unusually high for a company with slim net margins; that combination typically happens when a company has bought back a lot of its own stock or carries little equity on its balance sheet relative to its size, which amplifies the return figure rather than signaling outsized profitability.
- CEO Sumit Singh said the broader pet industry has not seen a meaningful rebound in consumer spending this year, but that Chewy is growing two to three times faster than the overall pet category and taking market share from competitors.
- Chewy raised and narrowed its full fiscal-2026 sales outlook to $13.46-$13.57 billion and nudged up its expected adjusted profit margin to 6.7-6.8%, while guiding next quarter’s sales to $3.32-$3.36 billion — signaling confidence the current pace of growth and margin improvement will continue despite a soft overall pet market.
- Management also cited AI-enabled productivity tools and automation in its warehouses as contributors to the quarter’s efficiency gains, part of a broader push to cut costs without slowing growth.
Q2 2026 in context
| Metric | Aug 2026 | Aug 2025 | Change |
|---|---|---|---|
| Revenue | $3.3B | $3.1B | +7.3% |
| Net income | $81M | $62M | +29.8% |
| Free cash flow | $90M | $106M | -15.5% |
| Diluted EPS | $0.20 | $0.14 | +42.9% |
| Gross margin | 30.4% | 30.4% | +0.0 pts |
| Operating margin | 2.8% | 2.2% | +0.5 pts |
| Net margin | 2.4% | 2.0% | +0.4 pts |
Figures for the quarter ended Aug 2026 and the quarter ended Aug 2025, as reported to the SEC.
How the stock took it
Chewy Inc closed at $23.27 on Sep 8, 2026, the last session before the report, and at $21.08 on Sep 10, 2026, the first session after it — -9.4% across the report.
Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.
Fundamentals
| Metric | Value | Period |
|---|---|---|
| Gross margin | 29.9% | Trailing 12 months |
| Operating margin | 2.4% | Trailing 12 months |
| Net profit margin | 2.0% | Trailing 12 months |
| Pretax margin | 2.5% | Trailing 12 months |
| EPS | $0.60 | Trailing 12 months |
| Revenue growth (YoY) | 6.1% | Trailing 12 months |
| EPS growth (YoY) | -32.5% | Trailing 12 months |
| Return on equity | 57.3% | Trailing 12 months |
Sources: company report · verified fundamentals · earnings call