Chewy Inc. (NYSE: CHWY) reported fourth-quarter results that significantly exceeded earnings expectations, driving shares up 13% intra-day Wednesday.
The company posted adjusted earnings per share of $0.27, well above the analyst consensus of $0.09 by $0.18. Revenue reached $3.26 billion, in line with estimates and representing an 8.1% increase on a normalized 13-week basis compared to the prior year period. On a reported basis, revenue rose 0.5% year over year due to the quarter having 13 weeks versus 14 weeks in the prior year.
Gross margin expanded by 90 basis points year over year to 29.4%, while adjusted EBITDA margin improved by 120 basis points to 5.0%. Adjusted EBITDA totaled $162.3 million, increasing by $37.8 million compared to the prior year.
For the full fiscal year 2025, Chewy reported net sales of $12.60 billion, reflecting an 8.3% increase on a normalized 52-week basis. Adjusted EBITDA rose to $719.2 million, up $148.7 million year over year, with adjusted EBITDA margin expanding 90 basis points to 5.7%.
The company also generated record free cash flow of $562 million during the year.
