Chewy, Inc. Revenue, History, and Strategy

Chewy generated $12.60 billion in net sales for fiscal year 2025, representing 8.3% year-over-year growth on a normalized 52-week basis (6.2% reported growth, which includes the impact of a 53-week FY2024). This three-year revenue trajectory — $10.12 billion in FY2022, $11.15 billion in FY2023, $11.86 billion in FY2024, and $12.60 billion in FY2025 — demonstrates consistent growth in a maturing market, with a three-year compound annual growth rate of 7.6%. Net income was $222.8 million in FY2025, down 43.3% from $392.7 million in FY2024, reflecting increased investment in Chewy Vet Care expansion, the Modern Animal acquisition integration, and share-based compensation. However, adjusted net income — which excludes share-based compensation, warrant valuation changes, and one-time items — was $541 million in FY2025, up from $726.5 million in FY2024 on a comparable basis, with adjusted diluted earnings per share of $1.27. Gross profit reached $3.75 billion in FY2025, yielding a gross margin of 29.8% — a 60 basis point expansion from 29.2% in FY2024 and 280 basis points above the 27.0% gross margin of FY2022. This margin expansion reflects three drivers: increased private-label product mix (American Journey, Frisco, Tylee's), improved supplier terms enabled by Chewy's $12.6 billion purchasing scale, and fulfillment network optimization that reduced per-unit shipping costs. Cost of goods sold was $8.84 billion (70.2% of net sales), leaving a gross profit pool that funds operating expenses and generates operating leverage. Operating income was $254.3 million in FY2025, up from $112.6 million in FY2024 — a 126% increase that demonstrates the scalability of Chewy's cost structure. Selling, general, and administrative expenses totaled approximately $2.4 billion (19.0% of net sales), while advertising and marketing spend was $825 million (6.5% of net sales). The advertising ratio is notably efficient for e-commerce: Amazon spends approximately 8% of revenue on marketing, while Wayfair spends 10-12%. Chewy's efficiency reflects the power of Autoship retention — once a customer is enrolled, the company does not need to re-acquire them through paid channels. Adjusted EBITDA — the metric management emphasizes for evaluating operating performance — was $719.2 million in FY2025 at a 5.7% margin, up 90 basis points from 4.8% in FY2024 and 170 basis points from 4.0% in FY2023. This margin expansion trajectory is among the most aggressive in consumer e-commerce and reflects the operating leverage inherent in Chewy's model: as the Autoship base grows, fulfillment costs decline per unit, customer service efficiency improves, and marketing intensity decreases. The FY2025 adjusted EBITDA margin of 5.7% compares favorably to Wayfair's 3-4% and Overstock's negative margins, though it trails Amazon's 15%+. Free cash flow reached a record $562.4 million in FY2025, up from approximately $450 million in FY2024, representing a free cash flow margin of 4.5%. Operating cash flow was $691.6 million, driven by net income of $222.8 million plus non-cash adjustments of $503.9 million (primarily $297.9 million in share-based compensation and $129.3 million in depreciation). Capital expenditures were $129.2 million, reflecting investments in fulfillment center automation, Chewy Vet Care clinic buildouts, and technology infrastructure. The company ended FY2025 with approximately $879 million in cash and cash equivalents and no debt — a fortress balance sheet that provides acquisition capacity and financial flexibility rare among growth-stage retailers. Net Sales Per Active Customer (NSPAC) reached $591 in Q4 FY2025, up 4% year-over-year from approximately $568 in Q4 FY2024. This metric is critical because it demonstrates that Chewy is growing not just by adding customers but by deepening relationships with existing ones. The 4% NSPAC growth in FY2025 reflects successful cross-sell into pharmacy, premium food, and supplies, as well as price increases on select products. Active customers grew 4% year-over-year to 21.3 million, with 813,000 net additions in FY2025 — a modest pace that reflects market maturity but also high customer quality. Valuation metrics as of June 2026 show Chewy trading at a trailing P/E of 39.0, forward P/E of 14.1, and price-to-sales of 0.70 on a trailing basis. The market capitalization of $8.3 billion and enterprise value of approximately $7.4 billion (net of cash) imply an EV/revenue multiple of 0.59x and EV/adjusted EBITDA of 10.3x. These multiples are deeply discounted relative to e-commerce peers — Amazon trades at 3.0x sales, Etsy at 3.0x, and even struggling Wayfair at 0.8x. The discount reflects investor concerns about growth deceleration and competitive pressure, but it also creates a potential value opportunity if Chewy can sustain mid-single-digit revenue growth while expanding margins.

The U.S. pet industry was valued at approximately $136 billion in 2023 and is projected to grow at a 4-5% compound annual growth rate through 2028. E-commerce penetration in pet retail has accelerated from 22% in 2019 to 32-35% in 2024 and is expected to reach 40-45% by 2026. Within online pet sales, two dominant players — Amazon and Chewy — control an estimated 80%+ of the market, with Amazon holding 45-59% share and Chewy holding 41% share according to Packaged Facts and Earnest Analytics data. Walmart captures approximately 33% of online pet sales, while PetSmart, Petco, and smaller players divide the remainder. Amazon is Chewy's most dangerous competitor because it competes on three dimensions simultaneously: price, selection, and logistics. With 180 million U.S. Prime members, Amazon can offer free two-day shipping on pet products without requiring a minimum order threshold — a convenience that Chewy matches only on orders over $49. Amazon's Subscribe & Save program competes directly with Autoship, offering 5-15% discounts on recurring deliveries. Amazon's Wag private-label pet food and extensive third-party marketplace provide breadth that Chewy cannot match, with the pet supplies category generating over $800 million in annual revenue. Amazon's threat is not in customer service or pet-specific expertise — areas where Chewy dominates — but in capturing price-sensitive, convenience-oriented pet owners who already have Prime memberships and see no reason to maintain a separate Chewy account. The Earnest Analytics 2024 study showing that 63.8% of Chewy defectors migrated to Amazon confirms this dynamic. Walmart competes through omnichannel immediacy and price leadership. With 4,700+ U.S. stores offering same-day curbside pickup, Walmart captures pet owners who need food or litter immediately and cannot wait for shipping. Walmart's online pet sales share of 33% reflects its strength in bulky, heavy items that are expensive to ship — categories where in-store pickup provides a cost advantage. Walmart has also expanded pet services, including in-store veterinary clinics and telehealth, directly challenging Chewy Health. Walmart's advantage is physical proximity; its disadvantage is lack of pet-specific brand equity and the impersonal nature of its customer experience. PetSmart and Petco are the legacy brick-and-mortar specialists that Chewy disrupted. PetSmart, which acquired Chewy for $3.35 billion in 2017, remains a significant shareholder and operates 1,650+ stores with in-store grooming, training, and veterinary services (Banfield Pet Hospitals). Petco operates 1,400+ stores and has pivoted toward a health and wellness positioning, adding veterinary clinics, nutrition counseling, and subscription services. Both retailers face the structural decline of brick-and-mortar pet retail as e-commerce penetration rises, but they retain advantages in experiential purchases (grooming, training, adoption events) and emergency needs that online retailers cannot fulfill. PetSmart's ownership of Chewy creates a complex competitive dynamic — the parent company benefits from Chewy's growth but also competes for the same customer wallet. Emerging disruptors include fresh-food subscription services like The Farmer's Dog and Nom Nom, which target premium pet owners with human-grade, freshly prepared meals delivered on subscription. These companies are growing rapidly from a small base and challenge Chewy's traditional kibble and canned food margins. However, their high price points ($4-8 per day versus $1-2 for conventional food) limit addressable market size, and Chewy has responded by expanding its own fresh and human-grade offerings under the Tylee's and American Journey brands. Veterinary service consolidators — including Mars Veterinary Health (Banfield, BluePearl, VCA), National Veterinary Associates, and independent clinic groups — represent both competitors and potential partners for Chewy's health expansion. These groups control prescription routing and can influence where pet owners fill their prescriptions. Chewy's strategy is to partner with independent veterinarians through its PracticeHub platform while building its own Chewy Vet Care clinic network, creating a hybrid model that captures prescription revenue regardless of where the veterinary diagnosis occurs. The competitive dynamics are shifting toward ecosystem breadth. Amazon competes on logistics and selection; Walmart on price and immediacy; PetSmart/Petco on in-store services; and Chewy on subscription retention, customer service, and health integration. No single competitor offers the combination of Autoship predictability, pharmacy fulfillment, telehealth access, and veterinary clinic services that Chewy is building. The question is whether Chewy can execute this ecosystem strategy before Amazon or Walmart replicate its health services capabilities — or before pet owners consolidate their spending with generalist retailers who offer one-stop shopping for human and pet needs.