Financial Data and Key Metrics Changes - Q2 net sales grew by nearly 9% year over year to $3.1 billion, exceeding the high end of guidance range [5][17] - Gross margin reached 30.4%, expanding by nearly 80 and 90 basis points sequentially and year-over-year, respectively [6][17] - Adjusted net income for Q2 was $141.1 million, representing a 34.8% increase year over year [18] - Free cash flow for Q2 was nearly $106 million, with a robust liquidity position of approximately $1.4 billion [7][20] Business Line Data and Key Metrics Changes - Autoship customer sales reached $2.58 billion, representing 83% of Q2 net sales and a nearly 15% increase [5][6] - Hardgoods business grew over 15% in Q2, driven by structural volume growth [5] - Chewy Plus program showed strong growth, with approximately 3% of total monthly sales attributed to members [9][10] Market Data and Key Metrics Changes - Active customers increased to 20.9 million, reflecting a 4.5% year-over-year growth [6] - NESPAC (Net Effective Sales Per Active Customer) reached $591, representing a 4.6% year-over-year growth [6] - The overall industry growth is in the low to mid-single digits, while Chewy is growing at a 7% to 8% rate [61] Company Strategy and Development Direction - Chewy is focusing on expanding its Chewy Plus membership and private brands, with a new product line "Get Real" launched in August [10][12] - The company plans to open 8 to 10 new Chewy Vet Care practices in fiscal year 2025 [8] - Chewy aims to mitigate tariff-related costs and invest in growth initiatives to enhance market share [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in Chewy's ability to navigate macroeconomic pressures and continue gaining market share [15][21] - The second half of 2025 is expected to be dynamic, with plans to invest in growth while maintaining profitability [15][21] - Management anticipates continued gross margin expansion and a strong performance from the Chewy Plus program [21][22] Other Important Information - The company repurchased approximately 3 million shares for about $125 million in Q2 [19] - Chewy remains debt-free with a strong cash position, allowing for strategic investments [20] Q&A Session All Questions and Answers Question: Can you talk more about the investments required in the back half and into 2026? - Management indicated that investments will focus on enhancing customer discoverability and increasing awareness of new offerings like Chewy Plus and Get Real, primarily through existing customer engagement rather than external marketing [25][26] Question: How should we think about the leverage path into the back half? - Management expects SG&A leverage to improve in the back half of the year, driven by the ramp-up of fulfillment centers and structural growth [34][39] Question: Can you unpack the Q2 gross margin improvement and the drivers for Q3 and Q4? - Management noted that gross margin expansion is driven by product mix, increasing Autoship penetration, and a rational promotional environment, with expectations for continued growth [42][44] Question: How big do you think the fresh and frozen business can go over time? - Management estimates the total addressable market for the fresh and frozen category to grow from $3 billion to $4 billion currently to between $8 billion and $12 billion in the coming years [51][52] Question: What are your expectations regarding the advertising environment? - Management reported high competitive intensity in the advertising market but noted strong metrics in net traffic and mobile app engagement [57][62] Question: What are the competitive advantages Chewy has over retail giants? - Management emphasized Chewy's unique value proposition that combines e-commerce efficiency with personalized service, allowing for a strong position in the pet care market [67][70]

Core Insights - Chewy Inc. reported adjusted earnings of 33 cents per share for Q2 2025, surpassing both consensus estimates of 14 cents and management guidance of 30-35 cents [1] - The company's sales reached $3.10 billion, reflecting an 8.6% year-over-year increase, exceeding the consensus of $3.08 billion and management guidance of $3.06 billion-$3.09 billion [1] Sales Performance - Autoship customer sales amounted to $2.58 billion, marking a 14.9% increase [2] - Autoship sales represented 83% of net sales during the quarter [3] - Net sales per active customer rose by 4.6% to $591 [3] Profitability Metrics - Gross margin improved by 90 basis points year-over-year to 30.4% [3] - Adjusted EBITDA increased by 26.5% to $183.3 million, with an adjusted EBITDA margin of 5.9%, up 80 basis points year-over-year [3] - Net income decreased from $299.1 million a year ago to $62 million, while adjusted net income rose from $104.7 million to $141.1 million [4] Customer Growth and Outlook - Active customers grew by 4.5% year-over-year to 20.906 million [3] - Chewy anticipates Q3 adjusted earnings of 28-33 cents per share, compared to the consensus of 23 cents [5] - The company raised its fiscal 2025 sales guidance to $12.5 billion-$12.6 billion, slightly below the consensus of $12.58 billion [5]

Core Insights - Earnings from the pet-supplies retailer fell short of expectations after traders had heavily invested in the shares prior to the earnings update [1] Group 1 - The company's earnings did not meet market expectations [1] - There was significant trading activity in the company's shares leading up to the earnings report [1]

Core Viewpoint - Chewy's shares experienced a decline of up to 10% in premarket trading despite better-than-expected second quarter sales and an improved guidance for FY25, primarily due to disappointing bottom-line results that included a significant drop in profits [3]. Group 1 - Chewy reported second quarter sales that exceeded expectations [3]. - The company raised its guidance for fiscal year 2025 [3]. - The decline in shares was attributed to a lackluster bottom line performance [3].

Group 1 - The company is responsible for the development of transcript-related projects [1] - The company publishes thousands of quarterly earnings calls per quarter [1] - The company is continuing to grow and expand its coverage [1]

Group 1 - The core viewpoint of the article highlights that Chewy's stock experienced a significant drop of over 8% in pre-market trading due to disappointing financial results [1] - The company's Q2 net profit was reported at $62 million, which represents a substantial decline compared to $299.1 million in the same period last year [1]

Financial Performance - Net sales for the full year reached $12345 million, representing a 9.2% year-over-year growth[12] - Q2 2025 net sales were $3104 million, an 8.6% year-over-year increase[14] - Autoship customer sales for the full year totaled $10058 million, a 14.9% year-over-year increase[16] - Q2 2025 Autoship customer sales were $2577 million, up 14.9% year-over-year[18] - Net sales per active customer reached $591 in Q2 2025[10, 21] - Adjusted EBITDA for Q2 2025 was $183.3 million, with a 5.9% margin[10] - Free cash flow for Q2 2025 was $105.9 million[33] Customer Metrics - The company added 150,000 net new active customers sequentially[8] - Autoship customer sales accounted for 83.0% of net sales[10] - The company has 20.9 million active customers[21] Guidance - The company projects net sales of $3.07 billion to $3.10 billion for the third fiscal quarter of 2025, representing approximately 7% to 8% year-over-year growth[35] - The company anticipates adjusted diluted EPS of $0.28 to $0.33 for the third fiscal quarter of 2025[35] - The company forecasts net sales of $12.5 billion to $12.6 billion for the full fiscal year 2025[35] - The company expects an adjusted EBITDA margin of 5.4% to 5.7% for the full fiscal year 2025[35]

Company Overview - Chewy is the largest pet e-tailer in the U.S., offering approximately 130,000 products and partnering with around 3,200 trusted brands in the pet industry[90]. Customer Growth and Retention - Active customers have been growing over time, indicating successful customer acquisition and retention strategies[94]. - Net sales are primarily driven by the growth of new customers and active customers, as well as the frequency of purchases through the Autoship subscription program[99]. - Autoship customer sales are a key driver of recurring net sales, reflecting customer retention and purchasing behavior[97]. - Active customers increased by 4.5% to 20.906 million compared to 20.002 million in the prior year[114]. - Autoship customer sales increased by 14.9% to $2,576.9 million for the 13 weeks ended August 3, 2025, compared to $2,242.2 million in the prior year[114]. Financial Performance - Net sales for the 13 weeks ended August 3, 2025, reached $3,104.2 million, an increase of 8.6% compared to $2,858.6 million for the same period in 2024[114]. - Net income decreased by 79.3% to $62.0 million for the 13 weeks ended August 3, 2025, down from $299.1 million in the prior year[114]. - Adjusted EBITDA for the 13 weeks ended August 3, 2025, was $183.3 million, reflecting a 26.5% increase from $144.9 million in the same period last year[115]. - Adjusted net income for the 13 weeks ended August 3, 2025, was $141.1 million, a 34.8% increase from $104.7 million in the prior year[117]. - Earnings per share (diluted) decreased by 79.4% to $0.14 for the 13 weeks ended August 3, 2025, compared to $0.68 in the same period last year[117]. - Net sales for the twenty-six weeks ended August 3, 2025 increased by $483.9 million, or 8.4%, to $6.2 billion compared to $5.7 billion for the same period in 2024, driven by a 14.8% growth in autoship customer sales to $5.1 billion[122]. - Gross profit for the thirteen weeks ended August 3, 2025 increased by $98.4 million, or 11.7%, to $942.2 million, with a gross margin of 30.4%, an increase of 90 basis points from 29.5% in the prior year[125]. - Gross margin for the twenty-six weeks ended August 3, 2025 was 30.0%, an increase of 40 basis points from 29.6% in the prior year, supported by growth in sponsored ads and autoship customer sales[126]. Expenses and Cash Flow - Selling, general, and administrative expenses encompass fulfillment costs, payroll, and other corporate expenses[102]. - Selling, general and administrative expenses for the thirteen weeks ended August 3, 2025 rose by $50.7 million, or 8.2%, to $671.9 million, primarily due to increased fulfillment costs and operational expansion[127]. - Advertising and marketing expenses for the thirteen weeks ended August 3, 2025 increased by $10.1 million, or 5.3%, to $200.6 million, reflecting investments in customer acquisition and retention[130]. - Free cash flow for the 13 weeks ended August 3, 2025, was $105.9 million, up 15.7% from $91.5 million in the same period in 2024[118]. - Net cash provided by operating activities was $133.9 million for the 13 weeks ended August 3, 2025, an increase of 8.5% from $123.4 million in the prior year[118]. - Net cash provided by operating activities was $220.3 million for the twenty-six weeks ended August 3, 2025, compared to $205.3 million for the same period in 2024, reflecting an increase of approximately 7.3%[139][140]. - Net cash used in investing activities was $70.9 million for the twenty-six weeks ended August 3, 2025, primarily for capital expenditures of $65.7 million related to expanding operations[142]. - Net cash used in financing activities was $154.0 million for the twenty-six weeks ended August 3, 2025, significantly lower than $590.0 million used in the same period in 2024[146][147]. Economic Conditions - Macroeconomic conditions, including inflation and high interest rates, are being closely monitored as they impact consumer shopping behavior[91]. Future Plans and Investments - The company plans to continue investing in its infrastructure, including veterinary clinics and pharmacy facilities, to support future growth[142]. - The company is modernizing its finance information technology architecture to enhance scalability, visibility, and analytical capabilities, with completion expected by the end of the 2025 fiscal year[129]. Shareholder Actions - The company authorized a share repurchase program of up to $500 million, with $359.8 million remaining available for repurchases as of August 3, 2025[149][152]. - During the twenty-six weeks ended August 3, 2025, the company repurchased 1,294,475 shares of Class A common stock for a total cost of $46.9 million[152]. Credit Facilities - The company has a senior secured asset-based credit facility with a borrowing capacity of $782.8 million as of August 3, 2025, with no outstanding borrowings[148]. Working Capital - The company experienced working capital changes of $121.6 million, primarily driven by increases in accounts receivable and inventories[140]. - The company has the option to raise additional funds through equity or debt financing arrangements as needed for working capital and strategic investments[138].

Financial Performance - Chewy, Inc. reported net sales of $3.10 billion for the second quarter of fiscal year 2025, reflecting an increase of 8.6 percent year over year [1] - The gross margin for the quarter was 30.4 percent, which represents an increase of 90 basis points compared to the previous year [1] - The company achieved a net income of $62.0 million, which includes share-based compensation expense and related taxes amounting to $79.1 million [1]

```markdown [Executive Summary & Business Overview](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Overview) [Q2 FY2025 Financial Highlights](index=1&type=section&id=Q2%20FY2025%20Financial%20Highlights) Chewy reported strong Q2 FY2025 results, with net sales exceeding guidance and significant growth in Autoship customer sales and active customers. The company also saw improvements in gross margin and adjusted EBITDA margin Key Operating Metrics | Metric | Q2 FY2025 (13 Weeks) | Q2 FY2024 (13 Weeks) | YoY Change | | :-------------------------------- | :------------------- | :------------------- | :--------- | | Net Sales | $3.10 billion | $2.86 billion | +8.6% | | Autoship Customer Net Sales | $2.58 billion | $2.24 billion | +14.9% | | Autoship % of Total Net Sales | 83.0% | 78.4% | +4.6 pp | | Active Customers | 20.91 million | 20.00 million | +4.5% | | Net Sales Per Active Customer (NSPAC) | $591 | $565 | +4.6% | GAAP Profitability Metrics | Metric | Q2 FY2025 (13 Weeks) | Q2 FY2024 (13 Weeks) | YoY Change | | :-------------------------------- | :------------------- | :------------------- | :--------- | | Gross Margin | 30.4% | 29.5% | +90 bps | | Net Income | $62.0 million | $299.1 million | -79.3% | | Net Margin | 2.0% | 10.5% | -850 bps | | Basic EPS | $0.15 | $0.70 | -78.6% | | Diluted EPS | $0.14 | $0.68 | -79.4% | Adjusted Profitability Metrics | Metric | Q2 FY2025 (13 Weeks) | Q2 FY2024 (13 Weeks) | YoY Change | | :-------------------------------- | :------------------- | :------------------- | :--------- | | Adjusted EBITDA | $183.3 million | $144.9 million | +26.5% | | Adjusted EBITDA Margin | 5.9% | 5.1% | +80 bps | | Adjusted Net Income | $141.1 million | $104.7 million | +34.8% | | Adjusted Basic EPS | $0.34 | $0.24 | +41.7% | | Adjusted Diluted EPS | $0.33 | $0.24 | +37.5% | [About Chewy](index=1&type=section&id=About%20Chewy) Chewy's mission is to be the most trusted and convenient destination for pet parents, offering a broad selection of high-quality products and services, including prescriptions, from numerous brands and private labels, delivered with exceptional customer care - Mission: To be the most trusted and convenient destination for pet parents and partners everywhere[5](index=5&type=chunk) - Offerings: Approximately **130,000 products and services** from around **3,200 brands**, including private brands, available through websites and mobile applications[5](index=5&type=chunk) [Forward-Looking Statements & Risks](index=2&type=section&id=Forward-Looking%20Statements%20%26%20Risks) [Forward-Looking Statements Disclaimer](index=2&type=section&id=Forward-Looking%20Statements%20Disclaimer) This section contains a standard disclaimer regarding forward-looking statements, indicating that actual results may differ materially due to substantial risks and uncertainties. Investors are cautioned not to place undue reliance on these statements, which are based on current assumptions and projections - Forward-looking statements are not guarantees of performance or results, and actual outcomes could differ materially due to various factors[10](index=10&type=chunk) - Key risk factors include the ability to sustain growth, manage macroeconomic environments, acquire and retain customers, manage supply chain disruptions, maintain technology infrastructure, ensure cybersecurity, and comply with regulations[9](index=9&type=chunk) [Financial Statements](index=3&type=section&id=Financial%20Statements) [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet provides a snapshot of Chewy's financial position, showing an increase in total assets and stockholders' equity, while total liabilities slightly decreased as of August 3, 2025, compared to February 2, 2025 Summary Balance Sheet | Metric (in millions) | As of August 3, 2025 | As of February 2, 2025 | | :------------------- | :------------------- | :--------------------- | | Total Assets | $3,118.8 | $3,014.5 | | Total Liabilities | $2,728.9 | $2,753.0 | | Total Stockholders' Equity | $389.9 | $261.5 | Current Assets | Current Assets (in millions) | As of August 3, 2025 | As of February 2, 2025 | | :--------------------------- | :------------------- | :--------------------- | | Cash and cash equivalents | $591.8 | $595.8 | | Accounts receivable | $221.2 | $169.0 | | Inventories | $874.6 | $836.7 | | Prepaid expenses and other current assets | $94.3 | $60.9 | | Total current assets | $1,781.9 | $1,662.4 | Current Liabilities | Current Liabilities (in millions) | As of August 3, 2025 | As of February 2, 2025 | | :-------------------------------- | :------------------- | :--------------------- | | Trade accounts payable | $1,226.0 | $1,175.9 | | Accrued expenses and other current liabilities | $967.2 | $1,030.8 | | Total current liabilities | $2,193.2 | $2,206.7 | [Condensed Consolidated Statements of Operations and Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Chewy's statements of operations show continued net sales growth for both the 13 and 26-week periods ended August 3, 2025. While gross profit increased, net income significantly decreased year-over-year, primarily due to a large deferred tax benefit in the prior year 13 Weeks Ended Statements of Operations | Metric (in millions) | 13 Weeks Ended Aug 3, 2025 | 13 Weeks Ended Jul 28, 2024 | YoY Change | | :------------------- | :------------------------- | :------------------------- | :--------- | | Net sales | $3,104.2 | $2,858.6 | +8.6% | | Cost of goods sold | $2,162.0 | $2,014.8 | +7.3% | | Gross profit | $942.2 | $843.8 | +11.7% | | Income from operations | $69.7 | $32.1 | +117.1% | | Net income | $62.0 | $299.1 | -79.3% | | Basic EPS | $0.15 | $0.70 | -78.6% | | Diluted EPS | $0.14 | $0.68 | -79.4% | 26 Weeks Ended Statements of Operations | Metric (in millions) | 26 Weeks Ended Aug 3, 2025 | 26 Weeks Ended Jul 28, 2024 | YoY Change | | :------------------- | :------------------------- | :------------------------- | :--------- | | Net sales | $6,220.2 | $5,736.3 | +8.4% | | Cost of goods sold | $4,354.2 | $4,038.5 | +7.8% | | Gross profit | $1,866.0 | $1,697.8 | +9.9% | | Income from operations | $146.6 | $96.7 | +51.6% | | Net income | $124.4 | $366.0 | -66.0% | | Basic EPS | $0.30 | $0.85 | -64.7% | | Diluted EPS | $0.29 | $0.84 | -65.5% | - The significant year-over-year decrease in net income and EPS is primarily due to a **$275.7 million tax benefit** from the release of a valuation allowance on deferred tax assets in the prior year (Q2 FY2024)[7](index=7&type=chunk)[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the 26 weeks ended August 3, 2025, Chewy generated increased cash from operating activities, while cash used in investing activities decreased significantly compared to the prior year, which included proceeds from marketable securities. Cash used in financing activities also decreased due to lower common stock repurchases Summary Cash Flow Activities | Cash Flow Activity (in millions) | 26 Weeks Ended Aug 3, 2025 | 26 Weeks Ended Jul 28, 2024 | | :------------------------------- | :------------------------- | :------------------------- | | Net cash provided by operating activities | $220.3 | $205.3 | | Net cash (used in) provided by investing activities | $(70.9) | $477.2 | | Net cash used in financing activities | $(154.0) | $(590.0) | | Net (decrease) increase in cash and cash equivalents | $(4.0) | $92.3 | | Cash and cash equivalents, end of period | $591.8 | $694.5 | - Investing activities in the prior year included **$538.4 million from maturities of marketable securities**, which was not present in the current period[16](index=16&type=chunk) - Repurchases of common stock decreased to **$152.6 million** in the current period from **$532.0 million** in the prior year, contributing to lower cash used in financing activities[16](index=16&type=chunk) [Non-GAAP Financial Measures](index=6&type=section&id=Non-GAAP%20Financial%20Measures) [Definition and Rationale](index=6&type=section&id=Definition%20and%20Rationale) Chewy utilizes several non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income, Adjusted basic/diluted EPS, and Free cash flow, to provide additional insights into its operating performance, liquidity, and capital allocation decisions, as these metrics are key for management evaluation - Non-GAAP metrics are used by management and the board of directors to evaluate operating performance, generate future operating plans, assess liquidity, and make strategic capital allocation decisions[17](index=17&type=chunk) - Adjustments typically exclude non-cash items (depreciation, amortization, share-based compensation), non-operating items (interest, income tax), and non-recurring items (transaction costs, severance, fair value changes of equity warrants, deferred tax asset valuation allowance releases)[18](index=18&type=chunk)[20](index=20&type=chunk) [Limitations of Non-GAAP Measures](index=6&type=section&id=Limitations%20of%20Non-GAAP%20Measures) Chewy acknowledges that its non-GAAP financial measures have limitations and should not be considered in isolation or as substitutes for GAAP results. These measures may not fully reflect capital expenditure needs, working capital changes, or recurring share-based compensation, and their comparability across companies may vary - Non-GAAP measures do not reflect capital expenditure requirements for asset replacement, interest income/expense, or changes in working capital[21](index=21&type=chunk) - Adjusted EBITDA and adjusted net income exclude share-based compensation, which is a recurring and important part of the company's compensation strategy[21](index=21&type=chunk) - Other companies may calculate these non-GAAP measures differently, reducing their usefulness for comparative analysis[19](index=19&type=chunk) [Key Financial and Operating Data & Reconciliations](index=7&type=section&id=Key%20Financial%20and%20Operating%20Data%20%26%20Reconciliations) [Financial and Operating Metrics](index=7&type=section&id=Financial%20and%20Operating%20Metrics) This section presents a comprehensive table of key financial and operating metrics, including both GAAP and non-GAAP measures, along with operational indicators like active customers and Autoship sales, for the 13 and 26-week periods, highlighting year-over-year changes Key Financial and Operating Data | Metric (in millions, except percentages) | 13 Weeks Ended Aug 3, 2025 | 13 Weeks Ended Jul 28, 2024 | % Change | | :--------------------------------------- | :------------------------- | :------------------------- | :------- | | Net sales | $3,104.2 | $2,858.6 | 8.6% | | Net income | $62.0 | $299.1 | (79.3)% | | Net margin | 2.0% | 10.5% | | | Adjusted EBITDA | $183.3 | $144.9 | 26.5% | | Adjusted EBITDA margin | 5.9% | 5.1% | | | Adjusted net income | $141.1 | $104.7 | 34.8% | | Basic EPS | $0.15 | $0.70 | (78.6)% | | Diluted EPS | $0.14 | $0.68 | (79.4)% | | Adjusted basic EPS | $0.34 | $0.24 | 41.7% | | Adjusted diluted EPS | $0.33 | $0.24 | 37.5% | | Net cash provided by operating activities | $133.9 | $123.4 | 8.5% | | Free cash flow | $105.9 | $91.5 | 15.7% | | Active customers (in thousands) | 20,906 | 20,002 | 4.5% | | Net sales per active customer | $591 | $565 | 4.6% | | Autoship customer sales | $2,576.9 | $2,242.2 | 14.9% | | Autoship customer sales as a percentage of net sales | 83.0% | 78.4% | | [Reconciliation of Non-GAAP Measures](index=7&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) This section provides detailed reconciliations of GAAP net income and net cash provided by operating activities to their respective non-GAAP counterparts: Adjusted EBITDA, Adjusted Net Income, and Free Cash Flow, for both the 13 and 26-week periods [Adjusted EBITDA Reconciliation](index=7&type=section&id=Adjusted%20EBITDA%20Reconciliation) Adjusted EBITDA Reconciliation (13 Weeks) | (in millions, except percentages) | 13 Weeks Ended Aug 3, 2025 | 13 Weeks Ended Jul 28, 2024 | | :-------------------------------- | :------------------------- | :------------------------- | | Net income | $62.0 | $299.1 | | Add (deduct): | | | | Depreciation and amortization | $32.1 | $28.5 | | Share-based compensation expense and related taxes | $79.1 | $82.5 | | Interest income, net | $(3.9) | $(12.9) | | Change in fair value of equity warrants | — | $(1.2) | | Income tax provision (benefit) | $12.0 | $(252.6) | | Severance costs | — | — | | Transaction related costs | $0.6 | $0.5 | | Other | $1.4 | $1.0 | | **Adjusted EBITDA** | **$183.3** | **$144.9** | | Net sales | $3,104.2 | $2,858.6 | | Net margin | 2.0% | 10.5% | | Adjusted EBITDA margin | 5.9% | 5.1% | [Adjusted Net Income and EPS Reconciliation](index=8&type=section&id=Adjusted%20Net%20Income%20and%20EPS%20Reconciliation) Adjusted Net Income and EPS Reconciliation (13 Weeks) | (in millions, except per share data) | 13 Weeks Ended Aug 3, 2025 | 13 Weeks Ended Jul 28, 2024 | | :----------------------------------- | :------------------------- | :------------------------- | | Net income | $62.0 | $299.1 | | Add (deduct): | | | | Share-based compensation expense and related taxes | $79.1 | $82.5 | | Change in fair value of unvested equity warrants | — | $(1.2) | | Deferred tax asset valuation allowance release | — | $(275.7) | | Severance costs | — | — | | **Adjusted net income** | **$141.1** | **$104.7** | | Basic EPS | $0.15 | $0.70 | | Diluted EPS | $0.14 | $0.68 | | Adjusted basic EPS | $0.34 | $0.24 | | Adjusted diluted EPS | $0.33 | $0.24 | Weighted-Average Common Shares (13 Weeks) | Weighted-average common shares | 13 Weeks Ended Aug 3, 2025 | 13 Weeks Ended Jul 28, 2024 | | :----------------------------- | :------------------------- | :------------------------- | | Basic | 414.2 | 429.4 | | Dilutive share-based awards | 14.2 | 8.5 | | Diluted | 428.4 | 437.9 | [Free Cash Flow Reconciliation](index=8&type=section&id=Free%20Cash%20Flow%20Reconciliation) Free Cash Flow Reconciliation (13 Weeks) | (in millions) | 13 Weeks Ended Aug 3, 2025 | 13 Weeks Ended Jul 28, 2024 | | :------------ | :------------------------- | :------------------------- | | Net cash provided by operating activities | $133.9 | $123.4 | | Deduct: Capital expenditures | $(28.0) | $(31.9) | | **Free Cash Flow** | **$105.9** | **$91.5** | - Free cash flow can be influenced by the timing of capital investments (e.g., new fulfillment centers, veterinary clinics), growth fluctuations affecting working capital, and changes in the cash conversion cycle[26](index=26&type=chunk) [Investor Relations](index=8&type=section&id=Investor%20Relations) [Contact Information](index=8&type=section&id=Contact%20Information) This section provides contact details for investor and media inquiries - Investor Contact: **ir@chewy.com**[27](index=27&type=chunk) - Media Contact: **Diane Pelkey, dpelkey@chewy.com**[27](index=27&type=chunk) ```