Chewy Reports 8.6% Sales Growth but 79.3% Decline in Net Income for Q2 Fiscal 2025

Chewy, Inc. reported its financial results for the second quarter of fiscal 2025, ending August 3, 2025, revealing a net sales increase of 8.6% to $3.1 billion compared to $2.9 billion in the same period last year. The company's net income, however, saw a significant decline of 79.3%, dropping to $62.0 million from $299.1 million in the prior year. This decrease in profitability was attributed to higher operating expenses and a reduced interest income, which fell to $4.3 million from $14.4 million year-over-year.

In terms of operational metrics, Chewy's active customer base grew by 4.5% to approximately 20.9 million, while net sales per active customer increased by 4.6% to $591. The company's Autoship program, which allows customers to schedule regular deliveries, contributed significantly to sales, with Autoship customer sales rising by 14.9% to $2.6 billion, representing 83.0% of total net sales. The growth in customer engagement and sales was driven by an expanded product offering and enhanced marketing efforts.

Chewy's total operating expenses for the quarter increased by 7.5% to $872.5 million, primarily due to higher fulfillment costs and increased advertising expenditures aimed at customer acquisition and retention. The company also reported a gross profit of $942.2 million, reflecting an increase of 11.7% from the previous year, with a gross margin improvement to 30.4%. This margin growth was supported by increased sales of higher-margin products and a greater proportion of sales from the Autoship program.

Strategically, Chewy has been focusing on expanding its fulfillment capabilities and enhancing its technology infrastructure. The company is currently modernizing its finance information technology architecture, which is expected to improve operational efficiency and support future growth. Additionally, Chewy has been active in share repurchase activities, having repurchased approximately $152.6 million worth of its common stock during the first half of the fiscal year, as part of a broader $500 million repurchase program initiated in May 2024.

Looking ahead, Chewy anticipates continued growth driven by its expanding customer base and product offerings, although it remains cautious about macroeconomic conditions that could impact consumer spending. The company plans to maintain its focus on enhancing customer experience and operational efficiency while navigating the challenges posed by the current economic environment.