Executive Summary

Chewy has not yet reported Q3 FY2025; management scheduled results for December 10, 2025, with no 8‑K 2.02 or transcript available at this time .
Q3 guidance calls for net sales of $3.07–$3.10B (7–8% YoY) and adjusted diluted EPS of $0.28–$0.33; FY25 net sales outlook was raised to $12.5–$12.6B and adjusted EBITDA margin maintained at 5.4–5.7% .
Strategic update: Chewy agreed to acquire SmartEquine (formerly SmartPak), expected to be adjusted EBITDA margin accretive; Q3 guidance reaffirmed alongside the deal announcement .
Setup for stock reaction: Guidance implies potential upside versus some non‑S&P consensus references (e.g., EPS $0.23, revenue ~$3.08B), while margin execution and Autoship trends remain the catalysts to watch into the print .

What Went Well and What Went Wrong

Gross margin expanded to 30.4% in Q2, up ~90 bps YoY, reflecting mix, pricing discipline, and operational efficiencies .
Autoship remained a core engine: Q2 Autoship sales reached ~$2.617B and 83% of net sales, supporting recurring revenue durability .
Management raised FY25 net sales outlook to $12.5–$12.6B and guided Q3 adjusted EPS to $0.28–$0.33, signaling confidence in 2H run‑rate and profitability trajectory .
Quote: “Q2 net sales exceeded the high end of our guidance range, growing nearly 9% year over year to $3.1 billion, with Autoship customer net sales increasing by 15% and representing 83% of total net sales” — Sumit Singh, CEO .

GAAP net income in Q2 fell YoY to $62.0M due to a large prior‑year deferred tax valuation allowance release; headline YoY comparisons remain noisy .
SG&A deleveraged by ~30 bps in Q2, and competitive intensity in advertising remains elevated, tempering near‑term margin leverage expectations .
Q3 KPIs and margins are unreported as of this writing; risk is that execution against guidance and mix (e.g., hardgoods tariffs, health) could drive variability in quarterly profitability .

Note: Q3 FY2025 results are not yet reported; tables show Q1–Q2 actuals and Q3 guidance ranges.

Metric	Q1 2025	Q2 2025	Q3 2025 Guidance
Net Sales ($USD Billions)	$3.12	$3.10	$3.07–$3.10
Diluted EPS (GAAP) ($USD)	$0.15	$0.14	n/a (Adjusted EPS guided: $0.28–$0.33)
Gross Margin (%)	29.6%	30.4%	—
Adjusted EBITDA ($USD Millions)	$192.7	$183.3	— (FY25 margin guided 5.4–5.7%)
Adjusted EBITDA Margin (%)	6.2%	5.9%	—

KPIs

KPI	Q1 2025	Q2 2025
Autoship Net Sales ($USD Billions)	$2.56	$2.617
Autoship % of Net Sales (%)	82.2%	83%
Active Customers (Millions)	20.76	20.906
NSPAC ($USD TTM)	$583	$591

Segment/Initiative updates (qualitative):

Chewy+ membership and private brands (“Get Real” fresh dog food) ramping as engagement drivers .

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales ($USD Billions)	Q3 FY2025	n/a	$3.07–$3.10	Initial Q3 guide
Adjusted Diluted EPS ($USD)	Q3 FY2025	n/a	$0.28–$0.33	Initial Q3 guide
Net Sales ($USD Billions)	FY2025	$12.30–$12.45	$12.5–$12.6	Raised
Adjusted EBITDA Margin (%)	FY2025	5.4–5.7	5.4–5.7	Maintained
Capex (% of Net Sales)	FY2025	1.5–2.0 (low end targeted)	Low end of 1.5–2.0	Maintained
FCF Conversion (% of Adj. EBITDA)	FY2025	~80%	~80%	Maintained
Net Interest Income/Other ($USD Millions)	FY2025	—	~$25–$30	New/maintained context
Effective Tax Rate (%)	FY2025	—	~20–22	New/maintained context

Note: Q3 call not yet held (scheduled Dec 10). Trends reflect Q1–Q2 disclosures.

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 FY2025)	Trend
Autoship & Recurring Revenue	Q1: Autoship $2.56B, 82.2%; Q2: ~$2.617B, 83% of sales	Guidance implies continued 7–8% YoY net sales growth; specifics pending call	Improving mix/recurrence
Chewy+ & Private Brands	Q2 commentary highlights ramp in Chewy+ and “Get Real” fresh dog food	Details pending; watch attach rates and NSPAC uplift on call	Positive trajectory
Veterinary Services (CVC)	Q2: CVC network outperformance and ecosystem benefits	Update expected; watch profitability and utilization metrics	Scaling
Tariffs/Macro	Q2: Consumables/health mix mitigates tariff exposure; hardgoods proactive onshoring	Q3 exposure update pending; monitor gross margin commentary	Manageable with mix
Supply Chain & Ops	Q2: Margin expansion via operations; SG&A leverage path discussed	Q3 operational cadence and holiday fulfillment pending	Neutral-to-positive
Equine Category Expansion	SmartEquine acquisition announced; margin accretive expected	Close expected in Q4 FY2025; integrations and synergies to be detailed	Strategic expansion

“Q2 net sales exceeded the high end of our guidance range, growing nearly 9% year over year to $3.1 billion, with Autoship customer net sales increasing by 15% and representing 83% of total net sales for the quarter.” — Sumit Singh, CEO .
“We are thrilled to welcome SmartEquine to Chewy… The transaction is expected to be adjusted EBITDA margin accretive upon closing.” — Mita Malhotra, President, Chewy Health .

Pending: Q3 FY2025 earnings call is scheduled for December 10, 2025; Q&A insights will be updated post‑call .

S&P Global consensus estimates for Q3 FY2025 were unavailable due to request limits; will anchor on S&P Global post‑release.
Third‑party references indicate non‑S&P consensus of EPS ~$0.23 and revenue ~$$3.05–$3.08B; management’s guidance of $0.28–$0.33 EPS and $3.07–$3.10B net sales implies a potential beat versus those figures, contingent on execution .

Into the print, watch for gross margin resilience amid tariffs/hardgoods recovery; Q2’s 30.4% sets a higher bar for sequential performance .
Autoship penetration (83% in Q2) continues to underpin recurring revenue and holiday quarter demand stability .
Guidance raised for FY25 net sales ($12.5–$12.6B) and Q3 adjusted EPS guided above some non‑S&P consensus — key potential catalysts if delivered .
SmartEquine acquisition should be margin accretive and expand health and equine verticals; monitor integration timing (expected close in Q4 FY2025) and synergy realization .
SG&A leverage is a swing factor; Q2 showed ~30 bps deleverage — look for management’s commentary on 2H moderation and holiday marketing intensity .
Short‑term trading: Set up favors positive reaction if Q3 prints at high end of guidance and margin commentary is constructive; risk skew if SG&A or mix pressures compress adj. margins.
Medium‑term: Chewy+ adoption, private brands, and CVC expansion can lift NSPAC and stickiness, supporting sustained mid‑single‑digit top‑line growth and targeted EBITDA margins .

SmartEquine acquisition agreement; Q3 guidance reaffirmed within announcement .
Corporate event notice: Q3 FY2025 reporting date and webcast registration (no financials disclosed yet) .

Q1 FY2025 highlights: Net sales $3.12B, gross margin 29.6%, diluted EPS $0.15, adjusted EBITDA $192.7M (6.2% margin); active customers 20.76M; NSPAC $583 .
Q2 FY2025 highlights: Net sales $3.10B, gross margin 30.4%, diluted EPS $0.14, adjusted EBITDA $183.3M (5.9% margin); active customers 20.906M; NSPAC $591; FY25 net sales outlook raised; Q3 guide introduced .