Shares of Chewy Inc. (NYSE:CHWY) climbed about 10% in premarket trading after the online pet retailer reported fourth-quarter results that topped analyst expectations.
The company posted adjusted earnings per share of $0.27, exceeding the analyst consensus of $0.09 by $0.18. Quarterly revenue totaled $3.26 billion, in line with forecasts and marking 8.1% growth on a normalized 13-week basis compared with the same period a year earlier. On a reported basis, revenue increased 0.5% year over year, reflecting that the latest quarter included 13 weeks versus 14 weeks in the prior-year period.
Profitability also improved during the quarter. Gross margin expanded by 90 basis points year over year to 29.4%, while adjusted EBITDA margin increased 120 basis points to 5.0%. Adjusted EBITDA reached $162.3 million, rising $37.8 million from the prior year.
“We exited 2025 from a position of real strength: $12.6 billion in net sales or 8.3% growth, $719 million of adjusted EBITDA or 26% growth, record free cash flow of $562 million, and 21.3 million active customers,” said Sumit Singh, Chief Executive Officer of Chewy. “That performance underscores the durability of the Chewy model and gives us confidence in our ability to deliver continued profitable growth, expanding margins, and strong cash generation in 2026 and beyond.”
For full-year fiscal 2025, Chewy reported net sales of $12.60 billion, up 8.3% on a normalized 52-week basis. Adjusted EBITDA totaled $719.2 million, an increase of $148.7 million year over year, while adjusted EBITDA margin expanded 90 basis points to 5.7%. The company also generated record free cash flow of $562 million during the year.
Following the earnings release, Jefferies analyst Kaumil Gajrawala highlighted two key indicators from the quarter: sequential active customer growth of 1% and the 120-basis-point improvement in adjusted EBITDA margin compared with a year earlier.