Chewy Lowers Sales Growth Forecast to 6.3–7.5% While Maintaining 6.6–6.8% EBITDA Margins
WOOF•Chewy cut its full-year sales guidance to 6.3–7.5% after reporting consumer frugality weighed on premiumization and attach rates. The company still expects adjusted EBITDA margins of 6.6–6.8% for fiscal 2026, driven by supply-chain efficiencies, sponsored ads, and disciplined spending.
1. Weakened Consumer Demand and Guidance Reduction
On its latest earnings call, Chewy executives acknowledged that pet owners are reducing discretionary purchases, causing premiumization and product attach rates to decline and prompting a full-year sales growth forecast cut to 6.3–7.5%.
2. Margin Expansion Through Operational Efficiency
Chewy reaffirmed its fiscal 2026 adjusted EBITDA margin target of 6.6–6.8%, attributing the expected expansion to supply-chain optimizations, increased on-site sponsored advertising, and disciplined cost management across the business.
3. Stock Underperformance Despite Profitability Gains
Despite margin improvements, Chewy's shares have fallen 54% over the past year as the broader S&P 500 climbed 23%, raising questions about investor confidence in sustained revenue growth under tighter consumer budgets.
