Chewy reports in-line earnings, raises full-year outlook

Investing.com -- Chewy Inc. (NYSE: CHWY) reported its second-quarter results on Wednesday ahead of the open, meeting analyst expectations, with adjusted EPS of $0.36 matching consensus estimates and revenue of $3.33 billion slightly exceeding the $3.32 billion estimate.

Net sales of $3.33 billion increased 7.3% YoY, or 5.7% excluding contributions from SmartPak and Modern Animal acquisitions. The company's adjusted EBITDA reached $226.7 million, up $43.4 million from the prior-year period, with adjusted EBITDA margin expanding 90 basis points to 6.8%. The company raised its full-year revenue outlook based on the quarter's performance.

Shares rose 0.8% following the announcement.

"Chewy delivered a strong second quarter, with growth of 7.3% to $3.33 billion of net sales at the high end of our guidance, and a 6.8% Adj. EBITDA margin, exceeding our expectations," said Sumit Singh, Chief Executive Officer. "The durability of our recurring revenue base, continued customer growth, and disciplined execution give us confidence to raise our full-year revenue and profitability outlook."

For the third quarter, Chewy issued revenue guidance of $3.32 billion to $3.36 billion, with a midpoint of $3.34 billion compared to the analyst consensus of $3.33 billion. For fiscal year 2027, the company expects revenue of $13.46 billion to $13.57 billion, with a midpoint of $13.515 billion versus consensus of $13.48 billion.

The company reported net income of $80.5 million, or $0.20 per diluted share, compared to $62.0 million, or $0.14 per diluted share, in the year-ago quarter. Gross margin remained consistent at 30.4%. Active customers grew 3.8% YoY to 21.7 million, while Autoship customer sales increased 9.3% to $2.82 billion, representing 84.6% of net sales.

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