Chewy Inc. (CHWY) Stock: Drops 0.59% Despite Robust 2025 Revenue and Profit Growth

TLDR

• Chewy drops 0.59% to $23.45 even with robust fiscal 2025 results
• Sales reach $12.6B as margins widen due to better efficiency
• Adjusted EBITDA increases while net income experiences strain
• Fourth-quarter results indicate consistent demand and ongoing margin expansion
• Investor response remains cautious despite solid customer and cash flow growth

(SeaPRwire) –   Chewy Inc. (CHWY) stock finished the session at $23.45, down 0.59% following volatility that erased initial advances. Shares retreated near the closing bell even as fiscal 2025 financials were strong. The firm recorded consistent revenue expansion and better margins, but the stock price indicated a wary market reaction.

Chewy, Inc., CHWY

Chewy Announces Revenue Increase and Margin Improvement

Chewy recorded fiscal 2025 net sales of $12.60 billion, a 6.2% increase from the previous year. Normalized revenue grew 8.3%, indicating robust underlying demand. Growth was sustained via increased customer engagement and a broader product range.

Gross margin hit 29.8%, up 60 basis points from last year. This growth was driven by enhanced cost management and greater operational efficiency. Chewy bolstered its profitability across its primary business units.

Adjusted EBITDA climbed to $719.2 million, a notable jump from the year before. The adjusted EBITDA margin widened to 5.7%, contributing to better earnings quality. Also, adjusted net income totaled $540.5 million, demonstrating steady operational execution.

Profitability Trends Display Mixed Indicators Amid Strong Operations

Chewy announced fiscal 2025 net income of $222.8 million, which includes share-based compensation. Net margin was 1.8%, a drop of 150 basis points annually. This decrease was due to elevated costs and continued investment initiatives.

Basic EPS was $0.54, and diluted EPS was $0.52. Both numbers fell by $0.39 from the prior year. However, adjusted earnings metrics improved, pointing to a healthier underlying business.

Adjusted diluted EPS increased to $1.27, up $0.23 year over year. This rise underscored efficiency gains when one-time costs are excluded. Adjusted figures offer a more transparent picture of Chewy’s operational power.

Q4 Results Bolster Growth Forecast for 2026

Chewy’s fourth-quarter net sales were $3.26 billion, a 0.5% annual increase. On a normalized 13-week basis, sales rose 8.1%, showing consistent demand. The company kept its growth momentum even though calendar shifts impacted reported numbers.

Quarterly gross margin came in at 29.4%, up 90 basis points from last year. Net income was $39.2 million, with net margin rising to 1.2%. These outcomes demonstrated steady operational progress throughout the quarter.

Quarterly adjusted EBITDA increased to $162.3 million, helping margins expand to 5.0%. Adjusted net income dipped slightly to $114.8 million due to cost pressures. Chewy finished the year with more than 21 million active customers and robust cash flow.