Chewy (CHWY) Stock Jumps 13% After Guidance Beats Wall Street Forecasts – Time to Buy?

TLDR

• Chewy stock rose ~13% after the company issued 2026 revenue guidance of $13.6B–$13.75B, above analyst estimates
• Q4 revenue came in at $3.26 billion, up 8.1% adjusted for the extra week in last year’s quarter
• Active customers grew 4% to 21.3 million; net sales per active customer rose 2.2% to $591
• Chewy expects AI-driven cost savings of $50M+ annually by 2027, with a “low tens of millions” benefit already expected in 2026
• Chewy Vet Care now has 18 locations and is described as the fastest-growing segment per active customer

Chewy posted fourth-quarter results Wednesday that largely met Wall Street expectations, but it was the 2026 outlook that got investors moving.

Chewy, Inc., CHWY

The pet-supplies retailer guided for full-year revenue of $13.6 billion to $13.75 billion. That topped the analyst consensus of $13.58 billion and sent the stock up roughly 13% on the day, closing around $26.50.

Q4 revenue landed at $3.26 billion, up 0.5% on a reported basis and 8.1% when adjusted for an extra week in last year’s comparable period. That matched estimates. Gross margin improved 90 basis points to 29.4%, and adjusted EBITDA rose from $124.5 million to $162.3 million.

Adjusted EPS came in at $0.27, just a penny below the $0.28 consensus. GAAP net income was $39.2 million, or $0.09 per share, up from $22.8 million a year ago.

Active customers grew 4% year-over-year to 21.3 million. Net sales per active customer climbed 2.2% to $591. CEO Sumit Singh noted that pet owners are increasingly treating pets like family members and trading up to premium products — a trend he expects to continue.

CFO Chris Deppe said the 2026 guidance doesn’t factor in any price inflation. Growth is expected to come from new customer additions and higher spending per existing customer.

AI Savings Are Coming Into Focus

Chewy has been building out AI infrastructure for several quarters and is now starting to deploy it across operations, including its service layer, supply chain, and fulfillment network.

Singh said AI-driven efficiencies should deliver a “low tens of millions” benefit in 2026, stepping up to roughly $50 million or more in annualized savings by 2027. The company is also ramping up operations at its next-generation fulfillment center in Houston as part of the broader cost-reduction effort.

For Q1 2026, Chewy guided for revenue of $3.33 billion to $3.36 billion and adjusted EPS of $0.40–$0.45, broadly in line with what analysts expected.

Vet Care Expansion Continues

Chewy Vet Care added 10 new locations in fiscal 2025, bringing the total to 18 practices. CVC currently operates in five states, with plans for national expansion.

Singh said CVC performance is exceeding expectations on customer satisfaction and is functioning as a customer acquisition tool that strengthens ties with high-value buyers. The company called it the fastest-growing segment by net sales per active customer.

Chewy also completed the acquisition of SmartEquine, an equine health platform. That deal is expected to add around $80 million in net sales in 2026 — under 1% of total revenue, but it signals a push beyond traditional household pets.

Despite the Wednesday rally, Chewy stock has lost nearly 20% of its value over the past 12 months and remains well below its 52-week high of $48.62.

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