What caused Chewy's operating income to rise in early 2025?

Chewy's operating income rose in early 2025 due to several key factors:

1. **Revenue Growth**: Chewy experienced a significant increase in net sales, which rose by approximately 15% year-over-year to $3.25 billion in Q4. This growth was primarily driven by increased customer spending and the frequency of purchases. The company's full-year net sales reached $11.86 billion, marking a 6% year-over-year growth.
2. **Customer Growth**: Chewy ended FY25 with 20.5 million active customers, marking its first year of year-over-year growth since FY23. This increase in active customers contributed to the revenue growth and operational income.
3. **Autoship Program**: The Autoship program, which allows users to schedule recurring deliveries of pet supplies, accounted for 80.6% of total sales and grew by 21% year-over-year. This program's success supported sales growth and provided a consistent revenue stream.
4. **Gross Profit Margin Improvement**: Chewy's gross profit margin increased to 29.2% from 28.4%, reflecting supply chain efficiency gains. This improvement indicates better operational efficiency and profitability.
5. **Adjusted EBITDA Margin Improvement**: The company's adjusted EBITDA margin for FY2024 reached 4.8%, reflecting a year-over-year expansion of approximately 150 basis points. This improvement suggests enhanced operational efficiency and profitability.

In conclusion, Chewy's operating income rise in early 2025 was primarily caused by revenue growth, customer growth, the success of its Autoship program, improved gross profit margin, and enhanced operational efficiency, as reflected by the increase in adjusted EBITDA margin. These factors combined to support Chewy's strong financial performance and growth prospects.