Double-digit autoship gains: Chewy beats expectations in Q3

Chewy reported $3.1 billion (€2.8B) in net sales for the third quarter of its fiscal year (FY) 2025, ending 2 November 2025. This reflects an 8.3% Year-over-Year (YoY) increase, exceeding the high end of its Q2 guidance.

This growth was driven by autoship sales, increasing 13.6% YoY to $2.6 billion (€2.4B).

“We ended Q3 with 21.2 million active customers, up nearly 5% year-over-year and delivered improvements across every part of the active customer funnel,” CEO Sumit Singh said in a call with investors, according to a Seeking Alpha transcript.

According to the company, autoship revenues are “highly predictable,” enabling operational planning to reduce costs and grow margins. This comes, according to Singh, in a way that gives Chewy “unique structural competitive advantages.”

The company’s CEO added that Chewy’s enhanced mobile app functionality also drove gains, increasing direct traffic from app customers and contributing to an approximately 15% YoY rise in app orders.

Performance highlights

Net income in Q3 surged to $59.2 million (€53.9M) from $3.9 million (€3.6M) a year ago, translating to basic and diluted earnings per share of $0.14. Net sales per active user grew 4.9% YoY to $595 (€541).

Gross income also rose nearly 10% to $928.2 million (€844.3M) while gross margin expanded roughly 50 basis points YoY to 29.8%, driven by sponsored ads growth, a strong autoship baseline and favorable category mix.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) grew by 30.9% to $180.9 million (€164.6M), with the adjusted EBITDA margin rising to 5.8%, representing a 100 basis points YoY expansion.

For the first 9 months of FY2025, the online pet retailer posted $9.3 billion (€8.46B) in net sales, rising 8.4% YoY.

Outlook

Chewy has narrowed its full-year 2025 net sales range in comparison with Q2.

For FY2025, Chewy now anticipates net sales to range between $12.58 billion (€11.5B) and $12.6 billion (€11.52B), and adjusted EBITDA margin to range between 5.6% and 5.7%.

For the fourth quarter of FY2025, the company expects net sales of $3.2 billion (€2.95B) to $3.3 billion (€2.97B), with adjusted diluted earnings per share ranging from $0.24 (€0.20) to $0.23 (€0.19).

During the earnings call, William Billings, interim Principal Financial Officer and Chief Accounting Officer at Chewy, noted that the earnings per share guidance for Q4 includes an estimated $10 million (€9.1M) of closing costs related to the pending acquisition of SmartEquine, the equine nutrition and wellness company acquired from Covetrus at the end of October. 

Chewy’s results are in line with those of other global retailers, which also reported positive revenue growth during the quarter.