Chewy is a trusted destination for pet parents and partners that is broadening beyond pet food into pet healthcare, prescriptions, and insurance, and the question for the next twelve months is whether the company can convert the record FQ1 2026 profitability, the 7.7% net sales growth, the 50 basis points of gross margin expansion, and the new $600 million senior secured term loan into the kind of profitable growth the company has been telegraphing. The FQ1 2026 print was the cleanest test of that thesis, and the cleanest signal is that the company posted FQ1 2026 Adjusted EBITDA of $253.1 million, up $60.4 million year over year, alongside the 130 basis points of Adjusted EBITDA margin expansion. The strategic tension is the deceleration in the pet category against the 7.7% net sales growth and the 200,000 net customer additions, and the forward question is whether Chewy can keep delivering profitable market-share gains while the pet category softens.
The pet category is the most resilient consumer-discretionary vertical, and Chewy is now compounding from a 190,000-product catalog across roughly 4,000 brand partners. The FQ1 2026 net sales of $3.36 billion grew 7.7% year over year on 200,000 net customer additions, the gross margin expanded 50 basis points to 30.1%, and the net income of $94.8 million included a $73.4 million share-based compensation expense. The new $600 million term loan, alongside the ABL extension to June 2031, gives the company the capital flexibility to keep investing in growth.
The FQ1 2026 Adjusted EBITDA of $253.1 million, the Adjusted EBITDA margin of 7.5% up 130 basis points year over year, the Adjusted net income of $179.9 million up $31.0 million year over year, the Adjusted basic and diluted EPS of $0.43 up $0.07 and $0.08 respectively, and the basic and diluted EPS of $0.23 up $0.08 anchor the print. The forward question is whether the FQ2 2026 print sustains the FQ1 2026 momentum, and whether the healthcare pivot translates into the kind of category-defining margin expansion the company has been telegraphing.