Chewy adds 208,000 customers, doubles down on AI investment

Chewy reported a 7.3% year-over-year (YoY) increase in net sales to $3.3 billion (€2.9B) for the second quarter (Q2) of fiscal year (FY) 2026, which ended on 2 August 2026.

Revenue grew 5.7% during the period, excluding contributions from its recent acquisitions of equine-care player SmartEquine (formerly known as SmartPak) and veterinary care provider Modern Animal.

Net income rose 30% to $80.5 million (€70M), translating into basic earnings per share (EPS) of $0.20 (€0.17).

Customer base 

The American online pet retailer added 208,000 net active customers, bringing its customer base to 21.7 million at the end of the quarter. 

Net sales per active customer stood at $602 (€524). CFO Chris Deppe told investors the new customer additions included 43,000 unique buyers who have transacted with SmartEquine since the acquisition.

Autoship sales accounted for 84.6% of total revenue, reaching $2.8 billion (€2.4B). This is up 9.3% YoY.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased by $43.4 million (€37.8M) YoY to $226.7 million (€197.2M), while the adjusted EBITDA margin rose 90 basis points to 6.8%.

Key categories accelerate

According to CEO Sumit Singh, performance exceeded expectations. 

“During the second quarter, while we did not see a meaningful recovery in the more pressured consumer backdrop for the pet market, importantly, we did not see further deterioration. The environment has broadly stabilized to the trends we observed exiting the first quarter,” he told investors. 

The CEO highlighted strong performance from Chewy Vet Care and the fresh and frozen portfolio, both delivering triple-digit revenue growth in Q2, as well as the equine, farm and exotics business, which registered its seventh consecutive quarter of mid-double-digit YoY sales growth. 

H1 performance

For the first half of the year, Chewy posted a 7.5% YoY increase in net sales to $6.8 billion (€5.9B). Autoship sales accounted for 84.5% of net sales, reaching $5.6 billion (€4.9B), up 9.9% YoY.

Net income surged 40.9% to $175.3 million (€152.5M), with basic EPS of $0.43 (€0.37). Adjusted EBITDA rose 27.6% to $479 million (€416.7M).

AI takes a bigger role

Chewy is deploying AI-enabled tools across customer care, pharmacy and Chewy Vet Care to reduce manual work and improve productivity.

Recently, the retailer launched Kai, an AI-powered assistant, to a select group of customers through its mobile app. Singh told investors that the assistant resolved approximately 30% of chats through self-service across common needs such as orders, returns, Autoship and account management.

“In pharmacy, AI is helping automate data extraction and validation while improving review consistency,” he said.

At select Chewy Vet Care locations, the company has also launched Callie, an AI-powered tool supporting appointment confirmations, scheduling and routine follow-ups.

Singh noted that these AI-related initiatives are expected to generate cost savings in the low tens of millions of dollars in FY2026, scaling to about $50 million (€43M) annualized in FY2027.

Guidance

Chewy maintained its full-year net sales guidance at $13.46 billion (€11.7B) to $13.57 billion (€11.8B), implying approximately 6.8% to 7.7% YoY growth. 

Meanwhile, the company raised the low end of its full-year adjusted EBITDA margin guidance to 6.7%, with the range now at 6.7% to 6.8%.

For Q3, net sales are projected to be $3.323 billion (€2.89B) to $3.358 billion (€2.92B), up approximately 6.6% to 7.7% YoY. Adjusted EBITDA margin is expected to range from 6.6% to 6.7%.