Q2 2025 Chewy Inc Earnings Call Transcript
Key Points
- Chewy Inc (CHWY) reported a 9% year-over-year increase in Q2 net sales, reaching $3.1 billion, exceeding the high end of their guidance range.
- The Autoship program saw significant growth, with customer sales reaching $2.58 billion, representing 83% of Q2 net sales and a 15% increase year-over-year.
- Chewy+ membership program is rapidly strengthening, contributing to 3% of Chewy's total monthly sales in July, with expectations to grow further.
- The company launched 'Get Real,' a new line of fresh dog food, which has received positive customer feedback and is expected to contribute to high gross profit per unit.
- Chewy Inc (CHWY) generated $183.3 million of adjusted EBITDA in Q2, representing a 5.9% margin and an 80 basis point increase year-over-year.
- SG&A expenses increased, driven by the ramp-up of the Houston fulfillment center and higher inbound inventory processing costs, leading to a 30 basis point year-over-year deleverage.
- Chewy Inc (CHWY) faces temporary higher costs due to increased wages and benefits, impacting overall profitability.
- The company anticipates potential pricing pressures in the second half of 2025 due to tariff-related costs, which could affect margins.
- Despite strong sales growth, the competitive intensity in the market remains high, requiring continued investment in strategic initiatives.
- Chewy Inc (CHWY) is experiencing higher inventory costs in hard goods to prepare for potential price increases in the market, impacting short-term financials.
Hello, everyone, and welcome to the Chewy second-quarter 2025 earnings call. My name is Emily, and I'll be coordinating your call today. (Operator Instructions)
I would now like to hand over to Natalie Nowak, Director of Investor Relations. Natalie, please go ahead.
Thank you for joining us on the call today to discuss our second quarter results for fiscal year 2025. Joining me today are Chewy's CEO, Sumit Singh; and Will Billings, our Chief Accounting Officer and Interim Principal Financial Officer. Will is a respective leader with extensive finance and accounting experience, and we appreciate his dedication to Chewy as he takes on this expanded role while we continue to search for a permanent CFO.
Our earnings release, which was filed with the SEC earlier today, has been posted to the Investor Relations section of our website. In addition to the earnings release, a presentation summarizing our results is also available on our website at investor.chewy.com.
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