How did CHWY's Q4 2025 earnings surprise investors?

Chewy's Q4 2025 earnings exceeded investor expectations in several key areas, reflecting the company's robust growth and operational performance:

1. **Revenue Outperformance**: Chewy reported an actual revenue of $3.25 billion for Q4 2025, surpassing the estimated $3.2 billion. This marked a 15% year-over-year growth, driven by significant top-line expansion and strong Autoship customer loyalty.
2. **Earnings Per Share (EPS) Beat**: The company reported an actual EPS of $0.28, which was significantly higher than the estimated $0.20. This represented a 40% beat on earnings expectations, indicating efficient cost management and profitability.

3. **Active Customer Growth**: Chewy ended FY25 with 20.5 million active customers, marking its first year of year-over-year growth since FY23. This active customer growth contributed to surpassing revenue estimates.
4. **Autoship Customer Loyalty**: Autoship, a key revenue stream for Chewy, accounted for 80.6% of total sales, with a 21% year-over-year growth. This outpaced overall revenue growth, highlighting the effectiveness of Chewy's customer retention strategies.
5. **Market Reaction**: Following the earnings release, Chewy's stock rose by 5.92% in premarket trading, reaching $35.60. This positive market reaction reflected investor confidence in Chewy's continued growth and profitability.

In summary, Chewy's Q4 2025 earnings exceeded investor expectations due to strong revenue outperformance, a significant beat on EPS, active customer growth, Autoship customer loyalty, and a positive market reaction. These factors combined to demonstrate Chewy's ability to sustain growth amid economic challenges, positioning it well for future expansion.