The quarter cleared a modest bar. Published expectations were roughly $3.32 billion of revenue and $0.18 of GAAP EPS; Chewy delivered $3.33 billion and $0.20, while adjusted diluted EPS was $0.36 against an approximately $0.36 consensus. That makes this a narrow earnings beat rather than a major upside surprise.
Profitability was the more constructive detail. Adjusted EBITDA margin reached 6.8%, up from 5.9% a year ago, and the company said the result exceeded its expectations. (Financial and Operating Data)
| Metric | Q2 FY2026 | Q2 FY2025 | Change / comparison |
|---|---|---|---|
| Net sales | $3,330.2M | $3,104.2M | +7.3% (Financial and Operating Data) |
| GAAP diluted EPS | $0.20 | $0.14 | +$0.06 (Income Statement) |
| Adjusted diluted EPS | $0.36 | $0.33 | +9.1% (Financial and Operating Data) |
| Adjusted EBITDA margin | 6.8% | 5.9% | +0.9 pts (Financial and Operating Data) |
| Active customers | 21.705M | 20.906M | +3.8% (Financial and Operating Data) |
| Autoship customer sales | $2,817.2M | $2,576.9M | +9.3% (Financial and Operating Data) |
| Free cash flow | $89.5M | $105.9M | -15.5% (Free Cash Flow reconciliation) |
The demand engine remains healthy, but growth is still measured. Active customers rose 3.8%, sales per active customer increased 1.9%, and Autoship sales grew 9.3%, supporting the recurring-revenue narrative. 〔0〕 (Management commentary)
Management raised the full-year outlook, which is the clearest upside signal. The filing does not provide the old and new guidance ranges, so the size of the increase cannot be measured precisely. Still, a higher outlook after a quarter that landed near the top of the revenue range and above internal margin expectations improves the forward picture versus the pre-release baseline. 〔1〕 (Management commentary)
Cash conversion and capital allocation temper the beat. First-half free cash flow was only $160.3 million versus $154.6 million a year earlier despite higher operating cash flow, while the company spent $552.8 million on acquisitions and repurchased $400.0 million of stock. Cash ended at $611.0 million versus $860.1 million at fiscal year-end, and long-term debt stood at $588.7 million. (Cash Flow statement; Balance Sheet) The net read is therefore a slight beat with improved profitability and raised expectations, not an across-the-board acceleration.
Read the original 8-K on SEC EDGAR ↗