Chewy (NYSE:CHWY) closed fiscal 2025, reporting fourth-quarter net sales of more than $3.26 billion and full-year net sales of more than $12.6 billion. The company posted 8.1% year-over-year sales growth in Q4 and 8.3% for the full year, while gross margin expanded, active customers grew to 21.3 million, and free cash flow reached a record $562.4 million.
For 2026, management expects net sales of $13.6 billion to $13.75 billion and adjusted EBITDA margin of 6.6% to 6.8%.
Chewy also spent considerable time on technology and how it is shaping customer experience and operations.
Leadership described a modern tech stack and central AI tooling that support work across various operations. Management also discussed agentic commerce as a future demand and distribution channel while continuing to build Chewy Vet Care and other health offerings.
Why It Matters: Chewy’s update demonstrates how AI is moving into day-to-day business execution. The company tied AI to customer experience, labor efficiency, fulfillment productivity, and cost savings that management expects to show up in financial results. The setup is notable because it links data infrastructure and operational use cases into a single plan.
- AI Infrastructure Is in Place: Chewy said it spent the last several quarters building the foundation needed for AI deployment across the company. That work included a unified enterprise data platform and central AI tooling. Management said those capabilities are now being embedded in the purchase experience and the supply chain and fulfillment network.
- AI Is Being Applied to Personalization: The company is using AI to improve how customers search for items and receive more personalized recommendations across its platforms. Management indicated that these efforts are intended to make the shopping experience easier and more relevant for pet parents while also increasing engagement across the Chewy ecosystem. The company also said it is monitoring agentic commerce and sees it as an additional demand and distribution channel that could help extend its reach to high-intent customers.
- Internal Tools Are Changing Daily Work: Chewy said internally developed AI tools are already being used in customer service, fulfillment, pharmacy, and marketing. Management pointed to self-service refunds and returns as one recent launch that is showing strong engagement and success rates. The company is also building tools for service agents that help them extract information and deliver more consistent support with less effort.
- The Savings Target Is Material: Chewy expects AI-driven efficiencies to contribute a low tens of millions of dollars benefit in 2026. Management also said there is a path to about $50 million or more in annualized savings in 2027 as these capabilities grow, giving a direct example of how enterprise AI investment can connect to lower cost to serve and SG&A leverage.
- Technology Is Tied to Health and Fulfillment Growth: Chewy also mentioned expansion in Chewy Vet Care and ramp-up of its next-generation Houston fulfillment center. The company said Chewy Vet Care reached 18 locations across five states in 2025 and is serving as a customer acquisition engine while increasing engagement with health customers. They also tied fulfillment efficiencies and private-brand growth under Chewy Made to margin expansion and customer retention.
Go Deeper -> Chewy’s Earnings Report – Marketbeat
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