$CHWY · Chewy, Inc.

Chewy filed its 10-Q for the quarter ended August 2, 2026. Net sales rose 7.3% YoY to $3.33B, driven by hardgoods (+14.4%) and pet health/specialty (+14.0%). Gross margin held steady at 30.4%. Operating income surged 32% to $92.0M, with operating margin expanding 60bps to 2.8%. Net income reached $80.5M ($0.20 diluted EPS) vs. $62.0M ($0.14) a year ago. The company deployed $200.1M on share repurchases during the quarter. The balance sheet shows $611M cash, $588.7M in long-term debt (new), and goodwill jumped to $334.1M from $39.4M reflecting the SmartPak and Modern Animal acquisitions.

Extended-hours trading shows CHWY at $23.72, up 1.93% from the regular-session close of $23.27. The market appears to be rewarding the combination of accelerating profitability, margin expansion, and aggressive buyback execution.

Chewy is demonstrating a clear shift from growth-at-all-costs to profitable growth, with margin expansion, aggressive buybacks, and strategic M&A all hitting simultaneously in one quarter.

Chewy's 30.4% gross margin and 2.8% operating margin continue to trail Amazon and traditional pet retail on profitability, but the 60bps YoY operating-margin expansion signals operating leverage is finally materializing at scale.

The 10-Q references risks around integrating the SmartPak and Modern Animal acquisitions, which added $294.7M in goodwill. Long-term debt of $588.7M is new this period — the company had zero long-term debt as of February 2026. Macroeconomic pressures on discretionary pet spending remain a headwind.