Chewy, Inc. Q2 2027 Earnings Call Summary
Chewy reported strong performance in its second quarter of fiscal 2027, outperforming the broader pet category by two to three times due to recurring revenue growth and Autoship sales increasing by 9.3%. The company maintained gross margins through a shift toward high-margin categories like health and pharmacy despite ongoing consumer spending pressures. Management highlighted triple-digit growth in Chewy Vet Care and fresh/frozen products, along with consistent mid-double-digit expansion in the equine and farm business. Chewy plans to launch an upgraded Plus loyalty program that includes integrated health benefits to deepen customer engagement. AI initiatives are expected to save tens of millions annually by 2027, while marketing spend will rise ahead of the holiday season. The company also acquired Modern Animal for $400 million and noted a drag on EBITDA margins during integration. Q2 adjusted EBITDA included one-time benefits totaling around $15 million from tariff refunds and gift card breakage. Management expects fuel costs to remain a headwind through the year, while treat sales slowed as consumers prioritized essential items over discretionary purchases.
Topics: AI initiatives customer engagement earnings revenue growth