Chewy logged higher profit and revenue in its latest quarter as it continued to grow its market share. ...

Business 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 [100]. - The company monitors macroeconomic conditions, including inflation and interest rates, which impact consumer behavior and business operations [101]. - Chewy's fiscal year 2025 ends on February 1, 2026, and is a 52-week year, while fiscal year 2024 was a 53-week year [103]. Customer Metrics - Active customers have increased over time, indicating growth in customer acquisition and retention [104]. - Active customers increased by 4.9% to 21.155 million compared to 20.160 million in the same quarter last year [125]. - Active customers grew by 4.9% to 21.2 million in the thirteen weeks ended November 2, 2025, contributing to higher net sales per active customer, which increased by $28 or 4.9% to $595 [132]. Sales and Revenue - Net sales for the 13 weeks ended November 2, 2025, reached $3,116.6 million, an increase of 8.3% compared to $2,877.6 million for the same period in 2024 [125]. - For the thirty-nine weeks ended November 2, 2025, net sales increased by $722.9 million, or 8.4%, to $9.3 billion compared to $8.6 billion in the prior year [133]. - Net sales for the thirteen weeks ended November 2, 2025 increased by $239.0 million, or 8.3%, to $3.1 billion compared to $2.9 billion for the same period in 2024, driven by a 13.6% increase in autoship customer sales to $2.6 billion [132]. Profitability - Adjusted EBITDA for the 13 weeks ended November 2, 2025, was $180.9 million, reflecting a 30.9% increase from $138.2 million in the prior year [127]. - Adjusted net income for the 13 weeks ended November 2, 2025, was $135.7 million, a 59.6% increase from $85.0 million in the same period of 2024 [128]. - Net income for the thirteen weeks ended November 2, 2025 was $59.2 million, compared to $3.9 million in the same period of 2024, indicating significant year-over-year growth [131]. - Net margin for the 13 weeks ended November 2, 2025, was 1.9%, up from 0.1% in the prior year [127]. Expenses - Cost of goods sold includes various expenses related to inventory and shipping, impacting overall profitability [111]. - Selling, general, and administrative expenses encompass fulfillment costs, payroll, and other corporate expenses, which are critical for operational efficiency [112]. - Selling, general and administrative expenses for the thirteen weeks ended November 2, 2025 increased by $38.6 million, or 6.2%, to $665.1 million, representing 21.3% of net sales, a decrease of 50 basis points from the previous year [138]. - Cost of goods sold for the thirteen weeks ended November 2, 2025 increased by $154.7 million, or 7.6%, to $2.2 billion, primarily due to higher sales and increased shipping costs [134]. Cash Flow and Investments - Free cash flow for the 13 weeks ended November 2, 2025, was $175.8 million, up 15.8% from $151.8 million in the previous year [129]. - Net cash provided by operating activities for the 39 weeks ended November 2, 2025, was $428.2 million, a 10.1% increase from $388.8 million in 2024 [129]. - Net cash used in investing activities was $127.9 million for the thirty-nine weeks ended November 2, 2025, primarily for capital expenditures related to expanding operations [156]. - Net cash used in financing activities was $221.0 million for the thirty-nine weeks ended November 2, 2025, primarily for repurchases of common stock [158]. Share Repurchase and Financing - The company authorized a share repurchase program of up to $500 million, with $304.9 million remaining available for repurchases as of November 2, 2025 [161][165]. - The ABL Credit Facility provides for non-amortizing revolving loans of up to $800 million, with a borrowing capacity of $783.1 million as of November 2, 2025 [160]. Tax and Adjustments - The effective tax rate for the thirty-nine weeks ended November 2, 2025 was lower than the U.S. federal statutory rate due to research and development credits and tax benefits from share-based compensation [147]. - The company incurred $355.2 million in non-cash adjustments, including share-based compensation and depreciation, for the thirty-nine weeks ended November 2, 2025 [153]. Technology and Operations - The company is modernizing its finance information technology architecture, aiming for completion by the end of fiscal year 2026, which will enhance data visibility and analytical capabilities without requiring significant capital investment [140].

Core Insights - The pet-food retailer has reported better-than-expected earnings and revenue for the third quarter [1] Financial Performance - The company achieved earnings that surpassed market expectations, indicating strong financial health [1] - Revenue figures for the third quarter also exceeded forecasts, reflecting robust sales performance [1]

Financial Performance - Net sales reached $3.12 billion, an increase of 8.3% year over year[7] - Gross margin improved to 29.8%, up 50 basis points year over year[7] - Net income was $59.2 million, with a net margin of 1.9%, an increase of 180 basis points year over year[7] - Adjusted EBITDA was $180.9 million, reflecting a year-over-year increase of $42.7 million[7] - Adjusted EBITDA margin increased to 5.8%, up 100 basis points year over year[7] - Basic earnings per share rose to $0.14, an increase of $0.13 year over year[7] - Diluted earnings per share also increased to $0.14, up $0.13 year over year[7] - Adjusted net income was $135.7 million, an increase of $50.7 million year over year[7] - Net income for the 39 weeks ended November 2, 2025, was $183.6 million, a decrease of 50.4% from $369.9 million in the prior year[23] - Adjusted EBITDA for the 39 weeks ended November 2, 2025, was $556.9 million, reflecting a 24.9% increase from $446.0 million in 2024[23] - Basic earnings per share for the 39 weeks ended November 2, 2025, was $0.44, down 49.4% from $0.87 in the previous year[23] - The adjusted net income for the 39 weeks ended November 2, 2025, was $425.7 million, a 30.3% increase from $326.8 million in 2024[23] - Net income for the 13 weeks ended November 2, 2025, was $59.2 million, compared to $3.9 million for the same period in 2024, representing a significant increase[24] - Adjusted EBITDA for the 39 weeks ended November 2, 2025, reached $556.9 million, up from $446.0 million in 2024, indicating a growth of approximately 24.7%[24] - Adjusted diluted earnings per share for the 39 weeks ended November 2, 2025, was $1.00, compared to $0.75 in 2024, representing a 33.3% increase[25] - Net sales for the 39 weeks ended November 2, 2025, were $9,336.8 million, compared to $8,613.9 million in 2024, showing a growth of approximately 8.4%[24] - Adjusted EBITDA margin for the 39 weeks ended November 2, 2025, was 6.0%, compared to 5.2% in 2024, indicating an improvement of 0.8 percentage points[24] - The net margin for the 39 weeks ended November 2, 2025, was 2.0%, down from 4.3% in 2024, indicating a decline of 2.3 percentage points[24] Customer Engagement and Market Position - The company continues to expand market share and outperform the pet category[4] - Chewy aims to enhance customer engagement through innovative product offerings and services[6] - Active customers increased by 4.9% to 21.155 million compared to 20.160 million in the previous year[23] - Autoship customer sales for the 39 weeks ended November 2, 2025, totaled $7,753.4 million, a 14.4% increase from $6,776.0 million in 2024[23] Cash Flow and Capital Expenditures - Net cash provided by operating activities for the 39 weeks ended November 2, 2025, was $428.2 million, up 10.1% from $388.8 million in 2024[23] - Free cash flow for the 39 weeks ended November 2, 2025, was $330.4 million, an increase of 11.7% compared to $295.9 million in the prior year[23] - Free cash flow for the 39 weeks ended November 2, 2025, was $330.4 million, compared to $295.9 million in 2024, reflecting an increase of about 11.6%[26] - Capital expenditures for the 39 weeks ended November 2, 2025, totaled $97.8 million, compared to $92.9 million in 2024, reflecting an increase of approximately 5.3%[26] - The company anticipates that free cash flow may be affected by the timing of capital investments and fluctuations in growth and working capital[26]

Core Insights - Chewy, Inc. reported net sales of $3.12 billion for Q3 2025, reflecting an 8.3% increase year over year [1] - The company's gross margin improved to 29.8%, which is an increase of 50 basis points compared to the previous year [1] - Chewy's net income for the quarter was $59.2 million, which includes share-based compensation expenses and related taxes amounting to $76.5 million [1]

Group 1: Earnings Reports and Expectations - Chewy Inc. is expected to report quarterly earnings of 12 cents per share on revenue of $3.10 billion [1] - Braze Inc. reported third-quarter revenue of $190.84 million, exceeding the estimate of $184.08 million, and raised its fiscal 2026 guidance [1] - Adobe Inc. is anticipated to post quarterly earnings of $5.39 per share on revenue of $6.11 billion [1] - Oracle Corp. is expected to report quarterly earnings of $1.64 per share on revenue of $16.22 billion [1] Group 2: Stock Performance - Chewy shares rose 0.9% to $35.16 in after-hours trading [1] - Braze shares surged 11.3% to $34.10 in after-hours trading [1] - Adobe shares increased by 0.3% to $345.18 in after-hours trading [1] - GE Vernova shares jumped 6.3% to $664.50 in after-hours trading [1] - Oracle shares gained 0.8% to $223.31 in after-hours trading [1] Group 3: Corporate Actions - GE Vernova doubled its dividend to 50 cents per share and raised its multi-year outlook, with a share repurchase program increase to $10 billion from $6 billion [1]

Core Insights - The Q3 earnings season has shown solid results, with a projected 13.4% increase in earnings per share for S&P 500 companies, marking the fourth consecutive quarter of double-digit earnings growth [2] - Analysts had initially expected a lower earnings growth of 7.9% for Q3, indicating a significant positive surprise in the actual results [3] Group 1: Company Earnings Reports - Oracle (ORCL) is one of the major companies yet to report its Q3 results, following a strong second quarter that showcased its leadership in AI and a substantial cloud backlog [1][4] - Specialty retailers such as GameStop (GME), AutoZone (AZO), and Chewy (CHWY) are expected to report their results soon, which will provide insights into consumer spending trends [4] - Adobe (ADBE) and Broadcom (AVGO) are also set to report their earnings next week, concluding the Q3 reporting season [5]

Core Viewpoint - Chewy Inc is expected to report strong growth in the pet care sector with its upcoming third-quarter financial results, highlighting revenue and customer growth potential [1]. Financial Performance - Analysts estimate Chewy's third-quarter revenue to be $3.10 billion, an increase from $2.88 billion in the same quarter last year, marking a growth of approximately 7.6% [2]. - The expected earnings per share (EPS) for the third quarter is 12 cents, down from 20 cents per share in the previous year [3]. - Chewy has consistently beaten revenue estimates in three consecutive quarters and in seven of the last ten quarters [2]. Analyst Insights - JPMorgan analyst Doug Anmuth anticipates strong third-quarter results and full-year guidance, maintaining an Overweight rating with a price target of $45 [4]. - Anmuth projects Chewy will add over 160,000 active customers in the third quarter and 718,000 for the full fiscal year [4]. - Bank of America Research highlights the pet care sector as a recent e-commerce winner, suggesting continued demand could benefit Chewy [6]. Customer Metrics - Key areas to monitor include customer additions and the performance of Autoship customers, which saw a 14.9% year-over-year increase in sales to $2.58 billion, representing over 80% of Chewy's total sales [7]. - The company previously raised its full-year sales guidance after the second quarter, and further increases are anticipated [9]. Market Sentiment - Chewy's stock has faced downward pressure, trading down 1.01% at $34.27, with a year-to-date increase of 2.6% [9]. - Recent analyst ratings include a Neutral rating from UBS with a lowered price target of $41, a Buy rating from Citigroup with a target of $42, and an Outperform rating from Mizuho with a target of $50 [8].

Group 1 - The Italian competition authority has initiated two investigations into Swiss watchmaker Swatch and Japan's Citizen Watch [1]

Core Insights - Chewy Inc. is a leading online retailer in the pet industry, set to release quarterly earnings on December 10, 2025, with an estimated EPS of $0.31 and projected revenue of approximately $3.1 billion [1] Financial Performance - For the quarter ended October 2025, Chewy is expected to report an EPS of $0.30, reflecting a significant 50% increase year-over-year, supported by a 7.5% revenue increase to approximately $3.09 billion [2] - The consensus EPS estimate has been revised upward by 9.7% over the past 30 days, indicating positive analyst sentiment [2] Valuation Metrics - Chewy's price-to-earnings (P/E) ratio is approximately 94.89, suggesting strong investor confidence in the company's future growth prospects [3][6] - The price-to-sales ratio stands at about 1.16, reflecting the market's valuation of the company at 1.16 times its annual sales [3] - The enterprise value to sales ratio is approximately 1.15, indicating the company's total valuation relative to its sales [4] Cash Flow and Debt Management - The enterprise value to operating cash flow ratio is around 23.33, showing how many times the operating cash flow can cover the enterprise value [4] - Chewy's earnings yield is about 1.05%, representing the return on investment for shareholders [4] - The debt-to-equity ratio is approximately 1.27, highlighting the company's reliance on debt compared to its equity [5][6] - The current ratio is approximately 0.81, suggesting potential challenges in covering short-term liabilities with short-term assets [5]