Chewy Inc Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Eric Sheridan - Goldman Sachs - Analyst : Thanks so much for taking my question, maybe two, if I can. Curious as the team continues to scale offerings like Autoship and Chewy+ how you continue to evolve your learnings about the lifetime value of customers on the platform. And the second part of the question would be how does those learnings feed back into your strategic initiatives in support of growth given the commentary right there towards the end of the call can submit on some of your priorities over the next 12 months to 18 months. Thanks so much.

Question: Eric Sheridan - Goldman Sachs - Analyst : No, that's super helpful, thanks so much. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 1:00PM, CHWY.N - Q3 2025 Chewy Inc Earnings Call

Question: Douglas Anmuth - J.P. Morgan - Analyst : Thank you so much for taking my question. Sumit, the active customer growth was the strongest it's been in a few quarters. Can you just talk about some of the drivers there and then just how you're thinking about that in 4Q and into '26 along with just health of the industry. And then just a follow-up on the investment levels in '26. Is there a way to frame just kind of how you're thinking about that relative to what we've seen in '25?

Question: Douglas Anmuth - J.P. Morgan - Analyst : Just really just trying to understand your comments towards the end there just on investment levels in '26 relative to what we've seen in '25. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 1:00PM, CHWY.N - Q3 2025 Chewy Inc Earnings Call

Question: Douglas Anmuth - J.P. Morgan - Analyst : Great, thank you Sumit.

Question: Steven Zaccone - Citigroup - Analyst : Hey, good morning. Thank you for taking my question. I want to follow up on Doug's question there. When you think about '26, can you share a little bit more on your mining outlook for demand you talked about net adds, but how do you think about the overall backdrop of the industry? And obviously, '25 has been an improvement versus '24. So how do you think about '26. And then in that context, pricing, we haven't really seen it in the industry. Do you see that being more of a tailwind as we get into next year?

Question: Nathan Feather - Morgan Stanley - Analyst : (inaudible) thanks for taking my question, from my end, first, we talked about the strong net adds, and with that marketing still showing really nice leverage year-on-year. So what's working in the customer acquisition funnel to help you be more efficient in acquiring cohorts should that persist? And then on the margin side, the full year '25 margin guidance does imply 4Q EBITDA margins take a step down on a sequential basis. Can you just help us think through the margin puts and takes at the end of 4Q.

Question: Nathan Feather - Morgan Stanley - Analyst : Margin (inaudible).

Question: Shweta Khajuria - Wolfe Research LLC - Analyst : Thank you for taking my question. Can I please try to -- first, Sumit, on gross margins, can you please talk about the trends in gross margins and how we should be thinking about it going forward, especially as we think of 2026 and just the puts and takes, how much of 2025 will actually apply for 2026 when we think about gross margin trends? And second, is when you think about the customer adds for '26 and the durability of customer adds, how should we be thinking about how much of retention is a driver versus gross adds? Where do you feel more confident? And which of the two factors do you think will be a bigger contributor. Thank you.

Question: Shweta Khajuria - Wolfe Research LLC - Analyst : Thanks Sumith.

Question: Anna Andreeva - Piper Sandler - Analyst : Thanks so much. Let me add my congrats. Nice quarter. Curious on Chewy+, can you talk about if you've seen any changes in retention when you raised the fee to $79 from $49 previously. And great to hear about expectations that the program is no longer dilutive. How should we think about that penetration into next year? And then we had a follow-up.

Question: Anna Andreeva - Piper Sandler - Analyst : That's really great, thank you so much for that. And just as a follow-up, on the 4Q guide, you mentioned that a running ahead of plan. Just anything else you can share what are you seeing in the business quarter-to-date? Just any learnings from the Black Friday and Cyber Week. I think you had mentioned previously that Chewy might lean into promotions in the fourth quarter. So far, I don't think we've seen that any update on that thinking?

Question: Dylan Carden - William Blair & Company, L.L.C. - Analyst : Really appreciate that, thank you. I'm curious the interaction between Chewy+ and Autoship, it is the idea that the number of auto ship customers could equate to the number of plus customers and it's just expanding the basket, reaching into more discretionary categories. And to the extent the scalability of that, you've provided numbers on box productivity, which, given your current scale, it doesn't move the needle much. But can you provide -- you kind of mentioned some of the broader ecosystem implications, kind of where are you seeing the benefits and maybe some of the markets where you have those open. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 1:00PM, CHWY.N - Q3 2025 Chewy Inc Earnings Call

Question: Dylan Carden - William Blair & Company, L.L.C. - Analyst : Great. I'll wait for that. I guess the question on Autoship versus Chewy+ -- I mean, is it simple math to think that all Autoship customers are available to become plus numbers and therefore, expanding you mentioned sort of net bet consolidation?

Question: Dylan Carden - William Blair & Company, L.L.C. - Analyst : Thank you very much