Chewy's Q1 2025 Earnings: A Strong Start to the Year with Exceeding Expectations
On a recent conference call, Chewy's CEO, Sumit Singh, reported that the company has achieved a strong start to 2025, exceeding expectations and demonstrating continued growth in active customers. The pet e-commerce giant delivered top-line results that surpassed guidance, with Q1 net sales increasing by over 8% to $3.12 billion.
The momentum at Chewy continues, driven by the company's ability to take market share amidst a resilient pet category. Strong participation from new and existing customers across various offerings and a favorable mix of core consumables and health and wellness categories contributed to the net sales performance. Notably, Chewy achieved 12.3% year-over-year growth within its hardgoods category.
The Autoship subscription program remains a pillar of strength for Chewy, enabling high visibility and predictability in its business while enhancing customer loyalty. First-quarter Autoship customer sales reached $2.56 billion, representing approximately 82% of Q1 net sales and a record high for the company. Growth in Autoship customer sales outpaced overall top-line growth, increasing by nearly 15% in the first quarter.
Chewy's active customer base also continued to grow, reaching 20.8 million at the end of Q1, reflecting a 3.8% year-over-year increase and an approximate sequential gain of 240,000 customers. This growth was driven by strength in gross additions and improvement in gross churn.
The company's gross margin came in at 29.6% for the quarter, with a significant expansion compared to the prior year. Adjusted EBITDA was $192.7 million, representing a 6.2% adjusted EBITDA margin and a year-over-year increase of approximately 50 basis points.
According to Sumit Singh, Chewy's CEO, "the hard work and dedication of every Chewy team member" contributed to the company's strong Q1 results. The report highlights Chewy's ability to take market share in a resilient pet category, driven by its efforts to refresh assortment and improve overall experience.
Chewy's first-quarter results demonstrate the company's continued growth and resilience in the face of industry challenges. The report suggests that the company remains committed to delivering exceptional customer experiences and driving business performance through strategic initiatives and operational efficiencies.
