Chewy Reports 8.1% Q4 Sales Growth, Targets $50M AI Savings by 2027
Chewy delivered net sales growth of 8.1% in Q4 and 8.3% for full year 2025, reaching $12.6 billion, and expects 8%–9% revenue growth with 100 bp margin expansion in 2026. AI-driven efficiencies will save low tens of millions in 2026 and target $50 million+ annual savings by 2027.
1. Q4 and Full-Year 2025 Performance
Chewy achieved net sales growth of 8.1% in Q4 and 8.3% for the full year 2025, delivering $12.6 billion in sales. The company saw stable customer engagement metrics and is leveraging private brand penetration to support future top-line growth.
2. 2026 Financial Outlook
Management expects revenue growth of 8%–9% in 2026, driven by stable customer growth and spend expansion, with gross margin expansion of approximately 100 basis points. Industry-wide pet adoption is projected to grow at a low single-digit rate with minimal pricing contribution.
3. AI-driven Efficiency Initiatives
Deployments of AI across customer service, fulfillment, pharmacy, and marketing are forecast to generate low tens of millions in cost savings during 2026. These efficiency gains are aimed at balancing reinvestment in growth while targeting more than $50 million in annualized savings by 2027.
4. Strategic Growth Initiatives
Chewy plans A&M leverage at 6%–6.5% of sales to expand its Chewy Made private brands to mid-teens penetration, enhancing margins. The SmartEquine acquisition is expected to contribute about $80 million in net sales in 2026, with potential to evolve into a multi-hundred-million-dollar high-margin category.