Chewy (CHWY) Shares Rise 13% on Upbeat 2026 Revenue Outlook

TLDR

• Shares of Chewy climbed approximately 13% following the company’s release of 2026 revenue forecasts between $13.6 billion and $13.75 billion, surpassing Wall Street projections
• Fourth-quarter revenue reached $3.26 billion, increasing 8.1% when accounting for the additional week in the prior-year period
• The customer base expanded 4% to 21.3 million, while revenue per active customer increased 2.2% to $591
• The company anticipates artificial intelligence will generate over $50 million in annual cost reductions by 2027, with benefits in the “low tens of millions” projected for 2026
• Chewy Vet Care has expanded to 18 facilities and is noted as the segment with the highest growth rate per active customer

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(SeaPRwire) –   Chewy reported fourth-quarter earnings on Wednesday that mostly aligned with analyst expectations, though the 2026 forecast was what drove investor activity.

Chewy, Inc. (CHWY)

The pet products retailer projected annual revenue between $13.6 billion and $13.75 billion. This exceeded the analyst consensus of $13.58 billion, driving shares up about 13% for the session to close near $26.50.

Fourth-quarter revenue totaled $3.26 billion, rising 0.5% as reported and 8.1% after adjusting for the additional week in the year-ago period. This met expectations. Gross margin expanded by 90 basis points to 29.4%, while adjusted EBITDA increased from $124.5 million to $162.3 million.

Adjusted earnings per share were $0.27, one cent short of the $0.28 consensus. GAAP net income totaled $39.2 million, or $0.09 per share, compared to $22.8 million in the prior year.

Active customers increased 4% year-over-year to 21.3 million. Net sales per active customer grew 2.2% to $591. Chief Executive Sumit Singh observed that pet owners increasingly view pets as family members and are upgrading to premium products—a trend he anticipates will persist.

Chief Financial Officer Chris Deppe stated that the 2026 forecast does not incorporate any pricing inflation. Anticipated growth will stem from acquiring new customers and increased spending from current ones.

AI-Driven Cost Savings Take Center Stage

Chewy has been developing its artificial intelligence infrastructure for multiple quarters and is now beginning to implement it throughout its operations, encompassing the service layer, supply chain, and fulfillment network.

Singh indicated that AI-powered efficiencies should yield benefits in the “low tens of millions” in 2026, escalating to approximately $50 million or more in annual savings by 2027. The company is also scaling up operations at its advanced fulfillment center in Houston as component of its wider cost-cutting initiative.

For the first quarter of 2026, Chewy forecast revenue between $3.33 billion and $3.36 billion and adjusted earnings per share of $0.40 to $0.45, generally consistent with analyst projections.

Veterinary Care Expansion Progresses

Chewy Vet Care opened 10 new facilities in fiscal 2025, increasing the total to 18 practices. The veterinary care division currently runs operations across five states, with ambitions for nationwide growth.

Singh reported that Chewy Vet Care is surpassing expectations for customer satisfaction and serves as a client acquisition mechanism that deepens relationships with high-value purchasers. The company identified it as the segment with the most rapid growth in net sales per active customer.

Chewy also finalized its purchase of SmartEquine, a horse health platform. The transaction is projected to contribute approximately $80 million in net sales in 2026—representing less than 1% of total revenue—but demonstrates a strategic move beyond conventional household pets.

Notwithstanding Wednesday’s gains, Chewy shares have declined nearly 20% over the preceding 12 months and continue to trade significantly below their 52-week peak of $48.62.