Chewy Slips After Mixed Q2 Results

Chewy reported its second-quarter results on September 9, 2026, posting a 7.3% rise in net sales to $3.33 billion and adjusted earnings of $0.36 per share. Active customers increased 3.8% to 21.7 million, and management raised its full-year outlook. The company also noted that artificial intelligence should generate about $50 million in annualized savings in fiscal 2027.

Despite those gains, organic revenue growth excluding acquisitions slowed to 5.7%. The adjusted EBITDA margin of 6.8% was aided by tariff refunds, rebate timing, and other discrete items that management said accounted for essentially all outperformance against expectations.

Following the report, Evercore ISI downgraded Chewy to In Line, citing minimal outperformance and a lack of clear catalysts, while RBC and TD Cowen reduced their price targets. The stock fell about 10% intraday before recovering slightly, leaving it down roughly 48% from its 52-week high.

Institutional ownership also showed signs of caution. A total of 44 hedge funds held positions in the company during the second quarter of 2026, down from 53 in the first quarter.