chwy-20250504

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 4, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission File Number: 001-38936

CHEWY, INC.

(Exact name of registrant as specified in its charter)


Delaware						90-1020167
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)
7700 West Sunrise Boulevard, Plantation, Florida						33322
(Address of principal executive offices)						(Zip Code)

(786) 320-7111

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, par value $0.01 per share	CHWY	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒


Class						Outstanding as of June 4, 2025
Class A Common Stock, $0.01 par value per share						195,511,443
Class B Common Stock, $0.01 par value per share						219,698,561

CHEWY, INC.

FORM 10-Q

For the Quarterly Period Ended May 4, 2025

TABLE OF CONTENTS


		Page
	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of May 4, 2025 and February 2, 2025	3
	Condensed Consolidated Statements of Operations and Comprehensive Income for the Thirteen Weeks Ended May 4 , 202 5 and April 2 8 , 2 024	4
	Condensed Consolidated Statements of Stockholders’ Equity for the Thirteen Weeks Ended May 4 , 202 5 and A pril 28, 2024	5
	Condensed Consolidated Statements of Cash Flows for the Thirteen Weeks Ended May 4 , 2025 and A pril 28, 2 024	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	26
Item 4.	Controls and Procedures	26
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 5.	Other Information	27
Item 6.	Exhibits	28
	SIGNATURES	29

PART I. FINANCIAL INFORMATION

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q for the quarterly period ended May 4, 2025 contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our share repurchase program, our future results of operations or financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will” or “would” or the negative of these words or other similar terms or expressions, although not all forward-looking statements contain these identifying words.

Although we believe that the forward-looking statements contained in this Quarterly Report on Form 10-Q are based on reasonable assumptions, you should be aware that many factors could cause actual results to differ materially from those in such forward-looking statements, including but not limited to, our ability to:

•sustain our recent growth rates and successfully manage challenges to our future growth, including introducing new products or services, improving existing products and services, and expanding into new jurisdictions and offerings;

•successfully respond to business disruptions;

•successfully manage risks related to the macroeconomic environment, including any adverse impacts on our business operations, financial performance, supply chain, workforce, facilities, customer services and operations;

•acquire and retain new customers in a cost-effective manner and increase our net sales, improve margins and maintain profitability;

•manage our growth effectively;

•maintain positive perceptions of the Company and preserve, grow and leverage the value of our reputation and our brand;

•limit operating losses as we continue to expand our business;

•forecast net sales and appropriately plan our expenses in the future;

•estimate our market share;

•strengthen our current supplier relationships, retain key suppliers and source additional suppliers;

•negotiate acceptable pricing and other terms with third-party service providers, suppliers and outsourcing partners and maintain our relationships with such parties;

•mitigate changes in, or disruptions to, our shipping arrangements and operations;

•optimize, operate and manage the expansion of the capacity of our fulfillment centers;

•provide our customers with a cost-effective platform that is able to respond and adapt to rapid changes in technology;

•limit our losses related to online payment methods;

•maintain and scale our technology, the reliability of our websites, mobile applications, and network infrastructure, including through the use of artificial intelligence;

•maintain adequate cybersecurity with respect to our systems and retain third-party service providers that do the same with respect to their systems;

•maintain consumer confidence in the safety, quality and health of our products;

•limit risks associated with our suppliers and our outsourcing partners;

•comply with existing or future laws and regulations in a cost-efficient manner;

•utilize net operating loss and tax credit carryforwards, and other tax attributes;

•adequately protect our intellectual property rights;

•successfully defend ourselves against any allegations or claims that we may be subject to;

•attract, develop, motivate and retain highly-qualified and skilled employees;

•respond to economic conditions, industry trends, and market conditions, and their impact on the pet products market;

•reduce merchandise returns or refunds;

•respond to severe weather and limit disruption to normal business operations;

•manage new acquisitions, investments or alliances, and integrate them into our existing business;

•successfully compete in new offerings;

•manage challenges presented by international markets;

•successfully compete in the pet products and services health and retail industry, especially in the e-commerce sector;

•comply with the terms of our credit facility;

•raise capital as needed; and

•maintain effective internal control over financial reporting.

You should not rely on forward-looking statements as predictions of future events, and you should understand that these statements are not guarantees of performance or results, and our actual results could differ materially from those expressed in the forward-looking statements due to a variety of factors. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current assumptions, expectations and projections about future events and trends that we believe may affect our business, financial condition, and results of operations. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled “Risk Factors” included under Part I, Item 1A in our Annual Report on Form 10-K for the fiscal year ended February 2, 2025, in our other filings with the Securities and Exchange Commission, our subsequent quarterly reports, and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q. While we believe that such information provides a reasonable basis for these statements, this information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments.

Investors and others should note that we may announce material information to our investors using our investor relations website (https://investor.chewy.com/), filings with the Securities and Exchange Commission (the “SEC”), press releases, public conference calls and webcasts. We use these channels, as well as social media, to communicate with our investors and the public about our company, our business and other issues. It is possible that the information that we post on these channels could be deemed to be material information. We therefore encourage investors to visit these websites from time to time. The information contained on such websites and social media posts is not incorporated by reference into this filing. Further, our references to website URLs in this filing are intended to be inactive textual references only.

Item 1. Financial Statements (Unaudited)

CHEWY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share data)


	As of
	May 4, 2025		February 2, 2025
Assets	(Unaudited)
Current assets:
Cash and cash equivalents	$	616.4	$	595.8

Accounts receivable	200.0		169.0
Inventories	806.9		836.7
Prepaid expenses and other current assets	88.5		60.9
Total current assets	1,711.8		1,662.4
Property and equipment, net	560.6		562.2
Operating lease right-of-use assets	449.5		450.4
Goodwill	39.4		39.4
Deferred tax assets	257.5		257.5
Other non-current assets	41.5		42.6
Total assets	$	3,060.3	$	3,014.5
Liabilities and stockholders’ equity
Current liabilities:
Trade accounts payable	$	1,177.0	$	1,175.9
Accrued expenses and other current liabilities	963.2		1,030.8
Total current liabilities	2,140.2		2,206.7
Operating lease liabilities	500.2		502.4
Other long-term liabilities	44.3		43.9
Total liabilities	2,684.7		2,753.0
Commitments and contingencies (Note 5)
Stockholders’ equity:
Preferred stock, $0.01 par value per share, 5,000,000 shares authorized, no shares issued and outstanding as of May 4, 2025 and February 2, 2025	—		—
Class A common stock, $0.01 par value per share, 1,500,000,000 shares authorized, 195,353,640 and 193,892,875 shares issued and outstanding as of May 4, 2025 and February 2, 2025, respectively	2.0		1.9
Class B common stock, $0.01 par value per share, 395,000,000 shares authorized, 219,698,561 shares issued and outstanding as of May 4, 2025 and February 2, 2025, respectively	2.2		2.2
Additional paid-in capital	1,891.4		1,840.2
Accumulated deficit	(1,520.5)		(1,582.9)
Accumulated other comprehensive income	0.5		0.1
Total stockholders’ equity	375.6		261.5
Total liabilities and stockholders’ equity	$	3,060.3	$	3,014.5

See accompanying Notes to Condensed Consolidated Financial Statements.

CHEWY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(in millions, except per share data)

(Unaudited)


	13 Weeks Ended
	May 4, 2025		April 28, 2024
Net sales	$	3,116.0	$	2,877.7
Cost of goods sold	2,192.2		2,023.7
Gross profit	923.8		854.0
Operating expenses:
Selling, general and administrative	653.1		602.6
Advertising and marketing	193.8		186.8
Total operating expenses	846.9		789.4
Income from operations	76.9		64.6
Interest and other income, net	1.0		13.8
Income before income tax provision	77.9		78.4
Income tax provision	15.5		11.5
Net income	$	62.4	$	66.9

Comprehensive income:
Net income	$	62.4	$	66.9
Foreign currency translation adjustments	0.4		0.4
Comprehensive income	$	62.8	$	67.3

Earnings per share attributable to common Class A and Class B stockholders:
Basic	$	0.15	$	0.15
Diluted	$	0.15	$	0.15
Weighted-average common shares used in computing earnings per share:
Basic	413.7		434.9
Diluted	425.3		436.4

See accompanying Notes to Condensed Consolidated Financial Statements.

CHEWY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in millions)

(Unaudited)


	13 Weeks Ended May 4, 2025
	Class A and Class B Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income		Total Stockholders’ Equity
	Shares	Amount
Balance as of February 2, 2025	413.6	$	4.1	$	1,840.2	$	(1,582.9)	$	0.1	$	261.5


Share-based compensation expense	—	—		74.5		—		—		74.5
Vesting of share-based compensation awards	2.1	0.1		(0.1)		—		—		—


Repurchases of common stock	(0.6)	—		(23.2)		—		—		(23.2)
Net income	—	—		—		62.4		—		62.4
Other comprehensive income	—	—		—		—		0.4		0.4
Balance as of May 4, 2025	415.1	$	4.2	$	1,891.4	$	(1,520.5)	$	0.5	$	375.6


	13 Weeks Ended April 28, 2024
	Class A and Class B Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive (Loss) Income		Total Stockholders’ Equity
	Shares	Amount
Balance as of January 28, 2024	431.8	$	4.3	$	2,482.0	$	(1,975.6)	$	(0.4)	$	510.3

Share-based compensation expense	—	—		65.4		—		—		65.4
Vesting of share-based compensation awards	3.6	0.1		(0.1)		—		—		—




Net income	—	—		—		66.9		—		66.9
Other comprehensive income	—	—		—		—		0.4		0.4
Balance as of April 28, 2024	435.4	$	4.4	$	2,547.3	$	(1,908.7)	$	—	$	643.0

See accompanying Notes to Condensed Consolidated Financial Statements.

CHEWY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(Unaudited)


	13 Weeks Ended
	May 4, 2025		April 28, 2024
Cash flows from operating activities
Net income	$	62.4	$	66.9
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	30.0		28.0
Share-based compensation expense	74.5		65.4
Non-cash lease expense	8.6		8.0
Change in fair value of equity warrants and investments	2.6		0.9

Unrealized foreign currency (gains) losses, net	(0.2)		0.6
Other	4.9		(1.9)
Net change in operating assets and liabilities:
Accounts receivable	(30.9)		(18.2)
Inventories	30.1		(33.1)
Prepaid expenses and other current assets	(27.4)		(8.5)
Other non-current assets	(0.5)		0.2
Trade accounts payable	1.1		38.8
Accrued expenses and other current liabilities	(61.7)		(58.3)
Operating lease liabilities	(9.2)		(8.2)
Other long-term liabilities	2.1		1.3
Net cash provided by operating activities	86.4		81.9
Cash flows from investing activities
Capital expenditures	(37.7)		(29.3)


Proceeds from maturities of marketable securities	—		535.0

Other	(3.5)		—
Net cash (used in) provided by investing activities	(41.2)		505.7
Cash flows from financing activities


Repurchases of common stock	(23.1)		—
Proceeds from, net of income taxes paid for, parent reorganization transaction	1.6		(54.8)
Principal repayments of finance lease obligations	(0.1)		(0.3)
Payments of secondary offering costs	(0.5)		—

Other	(2.9)		—


Net cash used in financing activities	(25.0)		(55.1)
Effect of exchange rate changes on cash and cash equivalents	0.4		(0.1)
Net increase in cash and cash equivalents	20.6		532.4
Cash and cash equivalents, as of beginning of period	595.8		602.2
Cash and cash equivalents, as of end of period	$	616.4	$	1,134.6

See accompanying Notes to Condensed Consolidated Financial Statements.

CHEWY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.Description of Business

Chewy, Inc. and its wholly-owned subsidiaries (collectively “Chewy” or the “Company”) is primarily an e-commerce business geared toward pet products and services. Chewy serves its customers through its retail websites, and its mobile applications and focuses on delivering exceptional customer service, competitive prices, outstanding convenience (including Chewy’s Autoship subscription program, fast shipping, and hassle-free returns), and a large selection of high-quality pet food, treats and supplies, and pet healthcare products and services.

The Company is controlled by a consortium including private investment funds advised by BC Partners Advisors LP (“BC Partners”) and its affiliates, La Caisse de dépôt et placement du Québec, affiliates of GIC Special Investments Pte Ltd, affiliates of StepStone Group LP and funds advised by Longview Asset Management, LLC (collectively, the “Sponsors”).

On October 30, 2023 (the “Closing Date”), the Company entered into certain transactions (the “Transactions”) with affiliates of BC Partners pursuant to an Agreement and Plan of Merger (the “Merger Agreement”). The Transactions resulted in such affiliates restructuring their ownership interests in the Company and Chewy Pharmacy KY, LLC (“Chewy Pharmacy KY”) becoming an indirect wholly-owned subsidiary of the Company.

On the Closing Date, affiliates of BC Partners transferred $1.9 billion to the Company to be used to fund: (i) tax obligations of its affiliates that were inherited by the Company as a result of the Transactions and (ii) expenses incurred by the Company in connection with the Transactions. The Merger Agreement requires affiliates of BC Partners to indemnify the Company for certain tax liabilities and includes customary indemnifications related to the Transactions. For additional information, see Note 10 - Income Taxes.

2. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The Company’s accompanying unaudited condensed consolidated financial statements and related notes include the accounts of Chewy, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. The unaudited condensed consolidated financial statements and notes thereto of Chewy, Inc. have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting and, therefore, omit or condense certain footnotes and other information normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) as set forth in the Financial Accounting Standards Board’s (“FASB”) accounting standards codification (“ASC”). In the opinion of management, all adjustments necessary for a fair statement of the financial information, which are of a normal and recurring nature, have been made for the interim periods reported. Results of operations for the quarterly period ended May 4, 2025 are not necessarily indicative of the results for the entire fiscal year. The unaudited condensed consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q for the quarterly period ended May 4, 2025 should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2025 (“10-K Report”).

Fiscal Year

The Company has a 52- or 53-week fiscal year ending each year on the Sunday that is closest to January 31 of that year. The Company’s 2025 fiscal year ends on February 1, 2026 and is a 52-week year. The Company’s 2024 fiscal year ended February 2, 2025 and was a 53-week year.

Significant Accounting Policies

Other than policies noted herein, there have been no significant changes from the significant accounting policies disclosed in Note 2 of the “Notes to Consolidated Financial Statements” included in the 10-K Report.

Use of Estimates

GAAP requires management to make certain estimates, judgments, and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates these estimates and judgments. Actual results could differ from those estimates.

Key estimates relate primarily to determining the net realizable value and demand for inventory, useful lives associated with property and equipment and intangible assets, valuation allowances with respect to deferred tax assets, contingencies, self-insurance accruals, evaluation of sales tax positions, and the valuation and assumptions underlying share-based compensation. On an ongoing basis, management evaluates its estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities.

Accrued Expenses and Other Current Liabilities

The following table presents the components of accrued expenses and other current liabilities (in millions):


	As of
	May 4, 2025		February 2, 2025
Outbound fulfillment	$	481.5	$	512.1
Advertising and marketing	129.4		146.3
Payroll liabilities	60.8		89.9
Accrued expenses and other	291.5		282.5
Total accrued expenses and other current liabilities	$	963.2	$	1,030.8

Stockholders’ Equity

Share Repurchase Activity

Share Repurchase Program

On May 24, 2024, the Company’s Board of Directors authorized the Company to repurchase up to $500 million of its Class A common stock, par value $0.01 per share (the “Class A common stock”), and/or Class B common stock, par value $0.01 per share (the “Class B common stock” and together with the Class A common stock, the “common stock”), pursuant to a share repurchase program (the “Repurchase Program”). Under the Repurchase Program, the Company may repurchase shares of common stock on a discretionary basis from time to time through open market repurchases, in privately negotiated transactions, through repurchases made in compliance with Rule 10b-18 and/or Rule 10b5-1 under the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, or other means. The actual timing and amount of any share repurchases remains subject to a variety of factors, including stock price, trading volume, market conditions, compliance with applicable legal requirements, and other general business considerations. The Repurchase Program does not require the Company to repurchase any specific dollar amount or to acquire any specific number of shares of common stock. The Repurchase Program has no expiration date and may be modified, suspended, or terminated at any time.

The total cost of repurchased shares of common stock in excess of par value, including the cost of commissions and excise taxes, is recorded to additional paid-in capital. The total cost for share repurchases executed and unpaid, as well as the cost of unpaid commissions and excise taxes, are included in accrued expenses and other current liabilities on the Company’s condensed consolidated balance sheets. During the thirteen weeks ended May 4, 2025, 664,533 shares of Class A common stock were repurchased and subsequently cancelled and retired pursuant to the Repurchase Program for a total cost of $23.2 million, excluding the cost of commissions and excise taxes. The authorized value of shares available to be repurchased under the Repurchase Program excludes the cost of commissions and excise taxes and as of May 4, 2025, the remaining value of shares of common stock that were authorized to be repurchased under the Repurchase Program was $383.5 million. As of May 4, 2025 and February 2, 2025, the total unpaid cost of share repurchases was $5.7 million and $5.6 million, respectively, which included $5.1 million, respectively, for excise taxes.

Interest and Other Income (Expense), net

The Company generates interest income from its cash and cash equivalents and marketable securities and incurs interest expense in relation to its borrowing facilities, finance leases, and uncertain tax positions. The following table provides additional information about the Company’s interest income (expense), net (in millions):


	13 Weeks Ended
	May 4, 2025		April 28, 2024
Interest income	$	4.5	$	15.8
Interest expense	(1.3)		(1.3)
Interest income, net	$	3.2	$	14.5

The Company made interest cash payments of $0.6 million during each of the thirteen weeks ended May 4, 2025 and April 28, 2024.

The Company’s other income (expense), net consists of: (i) changes in the fair value of equity warrants, investments, and tax indemnification receivables, (ii) foreign currency transaction gains and losses, and (iii) allowances for credit losses. The following table provides additional information about the Company’s other (expense) income, net (in millions):


	13 Weeks Ended
	May 4, 2025		April 28, 2024
Change in fair value of equity warrants	$	(2.6)	$	(0.7)
Foreign currency transaction losses	(0.1)		(0.5)

Change in fair value of tax indemnification receivables	0.5		0.5
Other expense, net	$	(2.2)	$	(0.7)

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. In November 2023, the FASB issued this ASU to update reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance. This update became effective with the Company’s Fiscal Year 2024 annual reporting period and with the Company’s Fiscal Year 2025 interim reporting periods. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements and resulted in additional segment disclosures within Note 8 – Segment Information.

Recently Issued Accounting Pronouncements

ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. In December 2023, the FASB issued this ASU to update income tax disclosure requirements, primarily related to the income tax rate reconciliation and income taxes paid information. This update is effective beginning with the Company’s 2025 fiscal year annual reporting period, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements.

ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. In November 2024, the FASB issued this ASU to improve disclosures regarding the types of expenses included in commonly presented expense captions. This update is effective beginning with the Company’s 2027 fiscal year annual reporting period, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements.

3. Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

Level 1-Valuations based on quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2-Valuations based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3-Valuations based on unobservable inputs reflecting the Company’s assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

Cash equivalents are carried at cost, which approximates fair value and are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices.

Marketable securities are included in prepaid expenses and other current assets on the Company’s condensed consolidated balance sheets, are carried at fair value, and are classified within Level 1 because they are valued using quoted market prices. Specific to marketable fixed income securities, the Company did not record any gross unrealized gains and losses as fair value approximates amortized cost. The Company did not record any credit losses during the thirteen weeks ended May 4, 2025. Further, as of May 4, 2025, the Company did not record an allowance for credit losses related to its fixed income securities.

Vested equity warrants and equity investments in public companies that have readily determinable fair values are carried at fair value and are classified as marketable securities within Level 1 because they are valued using quoted market prices.

Unvested equity warrants are classified within Level 3 of the fair value hierarchy as they are valued based on observable and unobservable inputs reflecting the Company’s assumptions, consistent with reasonably available assumptions made by other market participants. The Company utilized certain valuation techniques, such as the Black-Scholes option-pricing model and the Monte Carlo simulation model, to determine the fair value of unvested equity warrants. The application of these models requires the use of a number of complex assumptions based on unobservable inputs, including the expected term, expected equity volatility, discounts for lack of marketability, cash flow projections, and probability with respect to vesting requirements. Equity warrants are transferred from Level 3 to Level 1 of the fair value hierarchy upon vesting as they are no longer valued based on unobservable inputs.

The following table includes a summary of financial instruments measured at fair value as of May 4, 2025 (in millions):


	Level 1		Level 2		Level 3
Cash	$	616.4	$	—	$	—


Cash and cash equivalents	616.4		—		—


Equity investments	1.0		—		—
Marketable securities	1.0		—		—

Total financial instruments	$	617.4	$	—	$	—

The following table includes a summary of financial instruments measured at fair value as of February 2, 2025 (in millions):


	Level 1		Level 2		Level 3
Cash	$	595.8	$	—	$	—

Cash and cash equivalents	595.8		—		—

Equity investments	0.9		—		—
Marketable securities	0.9		—		—
Unvested equity warrants	—		—		4.9
Total financial instruments	$	596.7	$	—	$	4.9

The following table summarizes the change in fair value for financial instruments using unobservable Level 3 inputs (in millions):


	13 Weeks Ended
	May 4, 2025		April 28, 2024
Beginning balance	$	4.9	$	2.2

Equity warrants terminated	(4.9)		—
Change in fair value of unvested equity warrants	—		2.9

Equity warrants vested	—		(3.2)
Ending balance	$	—	$	1.9

As of February 2, 2025, the deferred credit subject to vesting and performance requirements recognized within other long-term liabilities in exchange for the equity warrants was $4.5 million. Level 3 significant unobservable inputs used in the fair value measurement of unvested equity warrants included probability of vesting and equity volatility, and reflected a weighted average of 0% and 56% as of May 4, 2025, respectively.

4. Property and Equipment, net

The following is a summary of property and equipment, net (in millions):


	As of
	May 4, 2025		February 2, 2025
Furniture, fixtures and equipment	$	241.0	$	208.3
Computer equipment	81.4		78.0
Internal-use software	243.0		230.0
Leasehold improvements	386.5		327.9
Construction in progress	50.4		130.1
	1,002.3		974.3
Less: accumulated depreciation and amortization	441.7		412.1
Property and equipment, net	$	560.6	$	562.2

Internal-use software includes labor and license costs associated with software development for internal use. As of May 4, 2025 and February 2, 2025, the Company had accumulated amortization related to internal-use software of $135.2 million and $125.1 million, respectively.

Construction in progress is stated at cost, which includes the cost of construction and other directly attributable costs. No provision for depreciation is made on construction in progress until the relevant assets are completed and put into use.

For the thirteen weeks ended May 4, 2025 and April 28, 2024, the Company recorded depreciation expense on property and equipment of $19.7 million and $18.1 million, respectively, and amortization expense related to internal-use software costs of $10.1 million and $8.9 million, respectively. The aforementioned depreciation and amortization expenses were included within selling, general and administrative expenses in the condensed consolidated statements of operations.

5. Commitments and Contingencies

Legal Matters

Various legal claims arise from time to time in the normal course of business. In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

The Company believes that it has adequately accrued for the potential impact of loss contingencies that are probable and reasonably estimable. The Company does not believe that the ultimate resolution of any matters to which it is presently a party will have a material adverse effect on the Company’s results of operations, financial condition or cash flows. However, the results of these matters cannot be predicted with certainty, and an unfavorable resolution of one or more of these matters could have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

6. Debt

ABL Credit Facility

The Company has a senior secured asset-based credit facility ( the “ABL Credit Facility”), which matures on April 1, 2030 following an amendment entered into on April 1, 2025, and provides for non-amortizing revolving loans in an aggregate principal amount of up to $800 million, subject to a borrowing base comprised of, among other things, inventory and sales receivables (subject to certain reserves). The ABL Credit Facility provides the right to request incremental commitments and add incremental asset-based revolving loan facilities in an aggregate principal amount up to the sum of (i) $250 million, (ii) the amount of permanent reductions of commitments thereunder and (iii) if greater than zero, the amount by which the borrowing base as of the date of incurrence exceeds the commitments thereunder, subject to customary conditions.

Borrowings under the ABL Credit Facility bear interest at a rate per annum equal to either a base rate or a term Secured Overnight Financing Rate (“SOFR”) (with no credit spread adjustment) at the Company’s option, plus a margin determined based on the Company's average excess availability, which is either (i) 0.25%, 0.50%, or 0.75% for borrowings at the base rate, or (ii) 1.25%, 1.50%, or 1.75% for SOFR borrowings. The Company is required to pay a commitment fee of 0.25% per annum with respect to the undrawn portion of the commitments, which is generally based on average daily usage of the facility. The ABL Credit Facility contains customary affirmative and negative covenants, all of which the Company is in compliance with. Based on the Company’s borrowing base as of May 4, 2025, which is reduced by standby letters of credit, the Company had $782.8 million of borrowing capacity under the ABL Credit Facility. As of May 4, 2025 and February 2, 2025, the Company did not have any outstanding borrowings under the ABL Credit Facility, respectively.

7. Leases

The Company leases all of its fulfillment and customer service centers and corporate offices under non-cancelable operating lease agreements. The terms of the Company’s real estate leases generally range from 5 to 15 years and typically allow for the leases to be renewed for up to three additional five-year terms. Fulfillment and customer service center, veterinary clinic, and corporate office leases expire at various dates through 2038, excluding renewal options. The Company also leases certain equipment under operating and finance leases. The terms of equipment leases generally range from 3 to 5 years and do not contain renewal options. These leases expire at various dates through 2025.

The Company’s finance leases as of May 4, 2025 and February 2, 2025 were not material and were included in property and equipment, net, on the Company’s condensed consolidated balance sheets.

The table below presents the operating lease-related assets and liabilities recorded on the condensed consolidated balance sheets (in millions):


		As of
Leases	Balance Sheet Classification	May 4, 2025		February 2, 2025
Assets
Operating	Operating lease right-of-use assets	$	449.5	$	450.4
Total operating lease assets		$	449.5	$	450.4

Liabilities
Current
Operating	Accrued expenses and other current liabilities	$	35.1	$	33.5
Non-current
Operating	Operating lease liabilities	500.2		502.4
Total operating lease liabilities		$	535.3	$	535.9

For the thirteen weeks ended May 4, 2025, assets acquired in exchange for new operating lease liabilities were $7.6 million. Lease expense primarily relates to operating lease costs and were included within selling, general and administrative expenses in the condensed consolidated statements of operations. Lease expense for the thirteen weeks ended May 4, 2025 and April 28, 2024 was $27.2 million and $26.3 million, respectively.

Cash flows used in operating activities related to operating leases were approximately $27.0 million and $25.6 million for the thirteen weeks ended May 4, 2025 and April 28, 2024, respectively.

8. Segment Information

The Company operates in one operating segment and one reportable segment organized around the sale of pet products and services, as the Chief Operating Decision Maker (“CODM”) reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. The CODM utilizes gross profit and net income as the measures of segment profit.

The following table presents information about the Company’s measures of segment profit and significant segment expenses regularly provided to the CODM (in millions):


	13 Weeks Ended
	May 4, 2025		April 28, 2024
Net sales	$	3,116.0	$	2,877.7
Cost of goods sold	2,192.2		2,023.7
Gross profit	923.8		854.0

Fulfillment costs	346.4		309.8
Share-based compensation expense and related taxes	78.0		69.5
Depreciation and amortization	30.0		28.0
Other selling, general, and administrative expenses	198.7		195.3
Advertising and marketing expenses	193.8		186.8
Income tax provision	15.5		11.5
Interest and other income, net	(1.0)		(13.8)
Net income	$	62.4	$	66.9

The CODM does not regularly review asset information by reportable segment, and therefore the Company does not report asset information by reportable segment.

9. Share-Based Compensation

2024 Omnibus Incentive Plan

In July 2024, the Company’s stockholders approved the Chewy, Inc. 2024 Omnibus Incentive Plan (the “2024 Plan”) replacing the Chewy, Inc. 2022 Omnibus Incentive Plan (the “2022 Plan”). The 2024 Plan became effective on July 11, 2024 and the maximum number of shares of Class A common stock that may be covered by awards granted under the 2024 Plan may not exceed the aggregate total of (i) 80.0 million shares plus (ii) the number of shares remaining available for new awards under the 2022 Plan as of the effective date, up to 3.1 million shares. Following the effective date, any shares subject to an award under the 2022 Plan or the 2024 Plan that expires or are canceled, forfeited, or terminated without the issuance of the full number of shares to which the award related will again be available for issuance under the 2024 Plan. No awards may be granted under the 2024 Plan after July 2034. The 2024 Plan provides for grants of: (i) options, including incentive stock options and non-qualified stock options, (ii) restricted stock units, (iii) other share-based awards, including share appreciation rights, phantom stock, restricted shares, performance shares, deferred share units, and share-denominated performance units, (iv) cash awards, (v) substitute awards, and (vi) dividend equivalents (collectively, the “awards”). The awards may be granted to (i) the Company’s employees, consultants, and non-employee directors, (ii) employees of the Company’s affiliates and subsidiaries, and (iii) consultants of the Company’s affiliates.

Service-Based Awards

The Company granted restricted stock units with service-based vesting conditions (“RSUs”) which vested subject to the employee’s continued employment with the Company through the applicable vesting date. The Company recorded share-based compensation expense for RSUs on a straight-line basis over the requisite service period and accounted for forfeitures as they occur.

Service-Based Awards Activity

The following table summarizes the activity related to the Company’s RSUs for the thirteen weeks ended May 4, 2025 (in millions, except for weighted-average grant date fair value):


	Number of RSUs	Weighted-Average Grant Date Fair Value
Unvested and outstanding as of February 2, 2025	22.5	$	22.65
Granted	11.0	$	33.36
Vested	(2.1)	$	24.83
Forfeited	(1.2)	$	23.36
Unvested and outstanding as of May 4, 2025	30.2	$	26.37

The following table summarizes the weighted average grant-date fair value of RSUs granted and total fair value of RSUs vested for the periods presented:


	13 Weeks Ended
	May 4, 2025		April 28, 2024
Weighted average grant-date fair value of RSUs	$	33.36	$	16.12
Total fair value of vested RSUs (in millions)	$	77.4	$	62.7

As of May 4, 2025, total unrecognized compensation expense related to unvested RSUs was $737.1 million and is expected to be recognized over a weighted-average expected performance period of 3.0 years.

The fair value for RSUs is established based on the market price of the Company’s Class A common stock on the date of grant.

Service and Performance-Based Awards

The Company granted restricted stock units which vested upon satisfaction of both service-based vesting conditions and company performance-based vesting conditions (“PRSUs”), subject to the employee’s continued employment with the Company through the applicable vesting date. The Company recorded share-based compensation expense for PRSUs over the requisite service period and accounted for forfeitures as they occur.

Service and Performance-Based Awards Activity

The following table summarizes the activity related to the Company’s PRSUs for the thirteen weeks ended May 4, 2025 (in millions, except for weighted-average grant date fair value):


	Number of PRSUs	Weighted-Average Grant Date Fair Value
Unvested and outstanding as of February 2, 2025	2.0	$	18.69
Granted	1.2	$	26.35


Unvested and outstanding as of May 4, 2025	3.2	$	21.58

The following table summarizes the weighted average grant-date fair value of PRSUs granted and total fair value of PRSUs vested for the periods presented:


	13 Weeks Ended
	May 4, 2025		April 28, 2024
Weighted average grant-date fair value of PRSUs	$	26.35	$	16.93
Total fair value of vested PRSUs (in millions)	$	—	$	0.6

As of May 4, 2025, total unrecognized compensation expense related to unvested PRSUs was $47.6 million and is expected to be recognized over a weighted-average expected performance period of 2.2 years.

The fair value for PRSUs with a Company performance-based vesting condition is established based on the market price of Class A common stock on the date of grant.

As of May 4, 2025, there were 71.3 million additional shares of Class A common stock reserved for future issuance under the 2024 Plan.

Share-Based Compensation Expense

Share-based compensation expense is included within selling, general and administrative expenses in the condensed consolidated statements of operations. The Company recognized share-based compensation expense as follows (in millions):


	13 Weeks Ended
	May 4, 2025		April 28, 2024
RSUs	$	67.6	$	64.1
PRSUs	6.9		1.3
Total share-based compensation expense	$	74.5	$	65.4

10. Income Taxes

Chewy is subject to taxation in the U.S. and various state, local, and foreign jurisdictions. The Company recorded an income tax provision during the thirteen weeks ended May 4, 2025 and April 28, 2024 of $15.5 million and $11.5 million, respectively.

The Company periodically evaluates the realizability of its net deferred tax assets based on all available evidence. The realizability of the Company’s net deferred tax assets is dependent on its ability to generate sufficient future taxable income prior to the expiration of tax attributes to support the utilization of these assets. As of May 4, 2025 and February 2, 2025, the Company maintained a full valuation allowance of $21.8 million against its foreign net deferred tax assets and certain U.S. state deferred tax assets.

In connection with the Transactions, the Company assumed $1.9 billion in income taxes which were fully indemnified by affiliates of BC Partners, and had an income tax payable of $1.8 million as of February 2, 2025. During the thirteen weeks ended May 4, 2025, the Company received refunds of $1.6 million, net of payments made, for federal and state income taxes in connection with the Transactions. Following the reclassification of $3.4 million of refunds received to reflect a payable to affiliates of BC Partners, the Company had an immaterial income tax payable pursuant to the Transactions as of May 4, 2025. During the thirteen weeks ended April 28, 2024, the Company paid $96.1 million, net of refunds received, for federal and state income taxes in connection with the Transactions. For more information, see Note 12 - Certain Relationships and Related Party Transactions.

The Company paid $0.2 million and $1.3 million, net of refunds received, for federal, state, and foreign income taxes other than in connection with the Transactions during the thirteen weeks ended May 4, 2025 and April 28, 2024, respectively.

In the aggregate, the Company received refunds for income taxes, net of payments made, of $1.4 million during the thirteen weeks ended May 4, 2025, and paid income taxes, net of refunds received, of $97.4 million during the thirteen weeks ended April 28, 2024.

11. Earnings per Share

Basic and diluted earnings per share attributable to the Company’s common stockholders are presented using the two-class method required for participating securities. Under the two-class method, net income attributable to the Company’s common stockholders is determined by allocating undistributed earnings between common stock and participating securities. Undistributed earnings for the periods presented are calculated as net income less distributed earnings. Undistributed earnings are allocated proportionally to the Company’s common Class A and Class B stockholders as both classes are entitled to share equally, on a per share basis, in dividends and other distributions. Basic and diluted earnings per share are calculated by dividing net income attributable to the Company’s common stockholders by the weighted-average shares outstanding during the period.

The following table sets forth basic and diluted earnings per share attributable to the Company’s common stockholders for the periods presented (in millions, except per share data):


	13 Weeks Ended
	May 4, 2025		April 28, 2024
Basic and diluted earnings per share
Numerator
Earnings attributable to common Class A and Class B stockholders	$	62.4	$	66.9
Denominator
Weighted-average common shares used in computing earnings per share:
Basic	413.7		434.9
Effect of dilutive share-based awards	11.6		1.5
Diluted	425.3		436.4
Anti-dilutive share-based awards excluded from diluted common shares	2.9		12.0
Earnings per share attributable to common Class A and Class B stockholders:
Basic	$	0.15	$	0.15
Diluted	$	0.15	$	0.15

12. Certain Relationships and Related Party Transactions

As of May 4, 2025 and February 2, 2025, the Company had a payable to affiliates of BC Partners of $10.3 million and $6.9 million, respectively, with respect to refunds received pursuant to tax payments made in connection with the Transactions, which was included in accrued expenses and other current liabilities on the Company’s condensed consolidated balance sheets. For more information, see Note 10 - Income Taxes.

As of May 4, 2025 and February 2, 2025, the Company had a receivable from affiliates of BC Partners of $22.2 million and $21.7 million, respectively, with respect to the indemnification for certain tax liabilities in connection with the Transactions, which was included in other non-current assets on the Company’s condensed consolidated balance sheets. For more information, see Note 10 - Income Taxes.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements and related notes thereto included in this Quarterly Report on Form 10-Q for the quarterly period ended May 4, 2025 (“10-Q Report”) and our audited consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the fiscal year ended February 2, 2025 (“10-K Report”). This discussion contains forward-looking statements that involve risks and uncertainties. As a result of many factors, such as those set forth under the “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” sections herein and in our 10-K Report, our actual results may differ materially from those anticipated in these forward-looking statements. Unless the context requires otherwise, references in this 10-Q Report to “Chewy,” the “Company,” “we,” “our,” or “us” refer to Chewy, Inc. and its consolidated subsidiaries.

Investors and others should note that we may announce material information to our investors using our investor relations website (https://investor.chewy.com/), filings with the SEC, press releases, public conference calls and webcasts. We use these channels, as well as social media, to communicate with our investors and the public about our company, our business and other issues. It is possible that the information that we post on these channels could be deemed to be material information. We therefore encourage investors to visit these websites from time to time. The information contained on such websites and social media posts is not incorporated by reference into this filing. Further, our references to website URLs in this filing are intended to be inactive textual references only.

Overview

We are the largest pet e-tailer in the United States, offering virtually every product a pet needs. We launched Chewy in 2011 to bring the best of the neighborhood pet store shopping experience to a larger audience, enhanced by the depth and wide selection of products and services, as well as the around-the-clock convenience, that only e-commerce can offer. We believe that we are the preeminent destination for pet parents as a result of our broad selection of high-quality products and expanded menu of service offerings, which we offer at great prices and deliver with an exceptional level of care and a personal touch. We are the trusted source for pet parents and partners and continually develop innovative ways for our customers to engage with us. We partner with approximately 3,200 of the best and most trusted brands in the pet industry, and we create and offer our own outstanding private brands. Through our websites and mobile applications, we offer our customers approximately 130,000 products, compelling merchandising, an easy and enjoyable shopping experience, and exceptional customer service.

Macroeconomic Considerations

Evolving macroeconomic conditions, including current inflation levels, tariffs, and high interest rates, have affected, and continue to affect, our business and consumer shopping behavior. We continue to monitor conditions closely and adapt aspects of our logistics, transportation, supply chain, and purchasing processes accordingly to meet the needs of our growing community of pets, pet parents and partners. As our customers react to these economic conditions, we will adapt our business accordingly to meet their evolving needs.

We are unable to predict the duration and ultimate impact of evolving macroeconomic conditions on the broader economy or our operations and liquidity. As such, macroeconomic risks and uncertainties remain. Refer to the section titled “Cautionary Note Regarding Forward-Looking Statements” in this 10-Q Report and the section titled “Risk Factors” in Item 1A of our 10-K Report for the fiscal year ended February 2, 2025.

Fiscal Year End

We have a 52- or 53-week fiscal year ending each year on the Sunday that is closest to January 31 of that year. Our 2025 fiscal year ends on February 1, 2026 and is a 52-week year. Our 2024 fiscal year ended February 2, 2025 and was a 53-week year.

Key Financial and Operating Data

We measure our business using both financial and operating data and use the following metrics and measures to assess the near-term and long-term performance of our overall business, including identifying trends, formulating financial projections, making strategic decisions, assessing operational efficiencies, and monitoring our business.


	13 Weeks Ended
(in millions, except net sales per active customer, per share data, and percentages)	May 4, 2025			April 28, 2024			% Change
Financial and Operating Data
Net sales	$	3,116.0		$	2,877.7		8.3	%
Net income (1)	$	62.4		$	66.9		(6.7)	%
Net margin	2.0		%	2.3		%
Adjusted EBITDA (2)	$	192.7		$	162.9		18.3	%
Adjusted EBITDA margin (2)	6.2		%	5.7		%
Adjusted net income (2)	$	148.9		$	137.1		8.6	%
Earnings per share, basic (1)	$	0.15		$	0.15		—	%
Earnings per share, diluted (1)	$

SEC Form 10-Q filed by Chewy Inc.