Chewy Inc (NYSE:CHWY) Reports Mixed Q3 Results with Profit Beat and Cautious Outlook

Chewy Posts Mixed Q3 Results as Profit Beat Offsets Revenue Miss and Cautious Outlook

Chewy Inc (NYSE:CHWY) delivered a quarter of contrasting signals for investors. The online pet retailer reported fiscal third-quarter 2025 earnings that surpassed analyst expectations on profitability but fell slightly short on the top line, while its outlook for the current quarter appears to have dampened investor enthusiasm.

Earnings and Revenue Versus Estimates

The company’s performance against Wall Street forecasts paints a clear picture of operational strength tempered by growth concerns.

• Revenue: Net sales for the quarter ended November 2, 2025, reached $3.12 billion, marking a solid 8.3% increase year-over-year. However, this figure came in just below the analyst consensus estimate of approximately $3.16 billion.
• Profitability: The bottom-line story was more positive. Chewy reported adjusted earnings per share (EPS) of $0.32, which notably exceeded the average analyst estimate of $0.13. This significant beat was driven by expanding margins.
• Key Profit Drivers:
  • Gross margin improved to 29.8%, up 50 basis points from the prior year.
  • Adjusted EBITDA surged to $180.9 million, with the corresponding margin expanding by 100 basis points to 5.8%.
  • Net income was $59.2 million, a substantial increase from $3.9 million in the same quarter last year.

Market Reaction and the Outlook Factor

Following the report, Chewy’s stock experienced volatility. Shares initially moved higher in after-hours trading on the strength of the profit beat but reversed course decisively in pre-market trading Wednesday, indicating a negative reception to the company's forward guidance.

While the press release did not provide specific numerical guidance for the fourth quarter, management commentary referenced exceeding the high end of their net sales guidance for Q3. The subsequent negative market reaction aligns with separate news reports indicating that Chewy’s Q4 earnings outlook fell short of Wall Street estimates. Analysts had been expecting revenue of approximately $3.34 billion for the upcoming quarter.

Summary of Press Release Highlights

CEO Sumit Singh struck an optimistic tone, stating, “Chewy continues to outperform the pet category and expand market share, with profits once again growing faster than sales.” He credited the company’s “structural resilience” and execution for the results. Beyond the headline numbers, the financial statements reveal several important developments:

• Strong Cash Generation: Net cash provided by operating activities for the first nine months of the fiscal year was $428.2 million.
• Active Capital Return: The company continued its share repurchase program, buying back $207.5 million worth of stock during the nine-month period.
• Healthy Balance Sheet: Cash and cash equivalents grew to $675.4 million, up from $595.8 million at the start of the fiscal year.

The quarter demonstrates Chewy’s ability to drive efficiency and profitability even in a competitive retail environment. However, the market’s focus has swiftly shifted from the earnings beat to the perceived caution embedded in the company’s outlook for the critical holiday quarter.

For a detailed look at Chewy’s historical earnings and future analyst estimates, you can review the data here.

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