Chewy lifts 2026 sales outlook to $13.57 billion

Chewy raised its fiscal 2026 sales guidance to a range of $13.46 billion to $13.57 billion, implying growth of 6.8% to 7.7%, up from its prior forecast of $13.40 billion to $13.55 billion. The company projects organic sales growth between 5.5% and 6.3%. Management also increased the low end of its adjusted EBITDA margin guidance by 10 basis points to 6.7%-6.8%, implying about $912 million in adjusted EBITDA at the midpoint.

In the second quarter, net sales rose 7.3% year over year to $3.33 billion, and adjusted EBITDA climbed 23.7% to $226.7 million. Adjusted earnings reached 36 cents per share, up 9.1% from a year earlier. Autoship customer sales increased 9.3% to $2.82 billion, accounting for 84.6% of quarterly net sales, while active customer numbers grew 3.8% to 21.7 million.

Acquisitions SmartPak and Modern Animal contributed above initial expectations. Meanwhile, early artificial intelligence initiatives, including customer-facing AI assistant Kai, are generating cost efficiencies. Kai resolved roughly 30% of chats through self-service. Chewy projects AI initiatives will deliver savings in the low tens of millions of dollars in fiscal 2026 and about $50 million on an annualized basis in fiscal 2027.

Management noted that profit upside in the quarter included about $10 million in timing-related benefits and more than $5 million in discrete items, which accounted for essentially all of the adjusted EBITDA beat. For fiscal 2026, the Zacks Consensus Estimate pegs earnings at $1.53 per share, up 20.5% from fiscal 2025, before rising to $1.86 per share in fiscal 2027. Chewy shares trade at 19.44 times forward earnings.