Q1 2026 Chewy Inc Earnings Call Transcript
Key Points
- Chewy Inc (CHWY) delivered solid Q1 results with a 7.7% year-over-year net sales growth, reaching approximately $3.6 billion.
- The company achieved record profitability with an adjusted EBITDA margin of 7.5%, reflecting a 130 basis points year-over-year expansion.
- Chewy Inc (CHWY) added nearly 200,000 net customers, ending the quarter with 21.5 million active customers, a 3.6% increase year over year.
- Autoship customer sales grew over 10% year over year, representing 84.4% of total net sales, reinforcing the predictability and durability of the revenue base.
- The acquisition of Modern Animal is expected to enhance Chewy's veterinary services, with plans to operate approximately 60 clinics by the end of fiscal 2026, contributing approximately $290 million in revenue at a steady state.
- The consumer environment has become more challenging, impacting discretionary attachment and premiumization behavior, leading to slower NSPAC growth than initially anticipated.
- Chewy Inc (CHWY) has updated its fiscal 2026 net sales outlook to reflect a more conservative view, with expected growth of 6.3% to 7.5% year over year.
- The company is experiencing modest pressure on premiumization and product attach rates among its current customer base.
- Fuel surcharges have impacted gross margins, with a low-single-digit million-dollar impact reported in Q1.
- The acquisition of Modern Animal is expected to be a modest margin rate drag in 2026, despite being adjusted EBITDA dollar neutral.
Hello, everyone. Thank you for joining us, and welcome to the Chewy first-quarter 2026 earnings call. (Operator Instructions)
I will now hand the conference over to Lee Horowitz, Head of Investor Relations and Strategic Finance. Lee, please go ahead.
Thank you for joining us on the call today to discuss our first-quarter results for fiscal year-end 2026. Joining me today are Chewy's CEO, Sumit Singh; and CFO, Chris Deppe. 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.
On our call today, we will be making forward-looking statements including statements concerning Chu's financial results and performance, industry trends, strategic initiatives, share repurchase program, and the environment in which we operate. Such statements are considered forward-looking
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