Financial Analysis

Acquisitions The following transactions were accounted for as a business combination in accordance with ASC 805 Business Combinations. Assets acquired and liabilities assumed were recorded in the accompanying condensed consolidated balance sheets at their estimated fair values, with the remaining unallocated purchase prices recorded as goodwill. Goodwill represents the expected synergies and cost rationalization from the merger of operations as well as intangible assets that do not qualify for separate recognition such as an assembled workforce. Pro forma information for these acquisitions has not been provided as the impact was not material to the Companys consolidated results of operations. SmartPak Acquisition On October 28, 2025, the Company entered into a definitive agreement to acquire SmartPak Equine, LLC (SmartPak). Under the terms of the definitive agreement, on February 2, 2026, the Company completed the acquisition of 100% of the membership interest in SmartPak, and SmartPak became a wholly-owned subsidiary of the Company. SmartPak is a leading provider of equine health and nutrition products and the acquisition is expected to further strengthen the Companys pet healthcare and specialty product offerings. The following table reconciles the purchase price to the cash paid for the acquisition, net of cash acquired (in millions): Purchase price $ 175.0 Less: cash acquired 0.2 Cash paid for acquisition of business, net of cash acquired $ 174.8 The following table summa …

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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 Companys 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 Companys financial condition, results of operations or cash flows. …

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Debt The following table summarizes the components of the Companys debt (in millions): As of August 2, 2026 February 1, 2026 Term Loan Credit Facility $ 600.0 $ Less: unamortized debt issuance costs 8.3 Total debt, net of discount and issuance costs 591.7 Less: current portion of long-term debt (3.0) Long-term debt, net $ 588.7 $ Term Loan Credit Facility On June 23, 2026, the Company entered into a seven-year senior secured term loan credit facility (the Term Loan Credit Facility), which matures on June 23, 2033, and provides term loans in an aggregate principal amount of $600 million. The proceeds of the Term Loan Credit Facility, together with cash on hand, can be used to pay fees, premiums, costs and expenses related to the incurrence of the facility and the related transactions and, to the extent not so applied, for general corporate purposes or working capital requirements. Borrowings under the Term Loan Credit Agreement bear interest at a rate per annum equal to an applicable margin plus, at the Companys option, either a base rate or a Term SOFR rate. The applicable margin is 1.75% for Term SOFR loans and 0.75% for base rate loans. As of August 2, 2026, the weighted-average interest rate and effective interest rate on the Term Loan Credit Facility were 5.41% and 5.66%, respectively. The Term Loan Credit Facility will amortize in equal quarterly installments in an aggregate annual amount equal to 1% of the original principal amount of such term loan facility, commencing …

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Share-Based Compensation 2024 Omnibus Incentive Plan In July 2024, the Companys 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 Companys employees, consultants, and non-employee directors, (ii) employees of the Co …

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Financial Instruments 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 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 and twenty-six weeks ended August 2, 2026. Further, as of August 2, 2026, 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 within Level 1 because they are valued using quoted market prices. The following table includes a summary of financial instruments measured at fair value as of August 2, 2026 (in millions): Level 1 Level 2 Level 3 Cash $ 611.0 $ $ Cash and cash equivalents 611.0 Equity investments 1.2 Marketable securities 1.2 Total financial instruments $ 612.2 $ $ The following table includes a summary of financial instruments measured at fair value as of February 1, 2026 (in millions): Level 1 Level 2 Level 3 Cash $ 858.8 $ $ Corporate bonds 1.3 Cash and cash equivalents 860.1 Corporate bonds 17.6 Equity investments 1.1 M …

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Income Taxes Income Tax Provision 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 and twenty-six weeks ended August 2, 2026 of $31.4 million and $67.9 million, respectively, compared to $12.0 million and $27.5 million for the thirteen and twenty-six weeks ended August 3, 2025, respectively. The Companys effective tax rate for the thirteen and twenty-six weeks ended August 2, 2026 was higher than the U.S. federal statutory rate, primarily due to state income taxes and shortfall from share-based compensation, partially offset by federal and state research and development credits. Deferred Tax Assets and Valuation Allowances The Company periodically evaluates the realizability of its net deferred tax assets based on all available evidence. The realizability of the Companys 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 August 2, 2026 and February 1, 2026, the Company maintained a full valuation allowance of $27.4 million against its foreign net deferred tax assets and certain U.S. state deferred tax assets. Tax Payments and Refunds In the aggregate, the Company paid $10.6 million, net of refunds received, for federal, state, and foreign income taxes, including those assumed in connection with certain transactions with affiliates o …

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Leases The Company leases all of its fulfillment and customer service centers, corporate offices, and veterinary clinics under non-cancelable operating lease agreements. The terms of the Companys 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 matured at various dates through 2026. 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 August 2, 2026 February 1, 2026 Assets Operating Operating lease right-of-use assets $ 482.1 $ 467.9 Total operating lease assets $ 482.1 $ 467.9 Liabilities Current Operating Accrued expenses and other current liabilities $ 42.3 $ 38.1 Non-current Operating Operating lease liabilities 527.2 518.7 Total operating lease liabilities $ 569.5 $ 556.8 For the twenty-six weeks ended August 2, 2026, assets acquired in exchange for new operating lease liabilities were $62.0 million which were primarily driven by the SmartPak and Modern Animal acquisitions as discussed in Note 3 - Acquisit …

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Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements The Company did not adopt any new ASUs during the twenty-six weeks ended August 2, 2026. Recently Issued Accounting Pronouncements 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 Companys 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. ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. In September 2025, the FASB issued this ASU to modernize the accounting for internal-use software costs, primarily by simplifying the requirements to capitalize software development costs. This update is effective at the beginning of the Companys 2028 fiscal year, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements. …

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Certain Relationships and Related Party Transactions As of August 2, 2026, the Company had a payable to affiliates of BC Partners of $3.8 million with respect to refunds received pursuant to tax payments made in connection with certain transactions with affiliates of BC Partners, which was included in accrued expenses and other current liabilities on the Companys consolidated balance sheets. As of February 1, 2026, the Company had a receivable from affiliates of BC Partners of $0.5 million with respect to future tax payments in connection with certain transactions with affiliates of BC Partners, which was included in prepaid expenses and other current assets on the Companys consolidated balance sheets. For more information, see Note 12 - Income Taxes. As of August 2, 2026 and February 1, 2026, the Company had a receivable from affiliates of BC Partners of $19.5 million and $18.9 million, respectively, with respect to the indemnification for certain tax liabilities in connection with certain transactions with affiliates of BC Partners, which was included in other non-current assets on the Companys condensed consolidated balance sheets. …

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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 Companys measures of segment profit and significant segment expenses regularly provided to the CODM (in millions): 13 Weeks Ended 26 Weeks Ended August 2, 2026 August 3, 2025 August 2, 2026 August 3, 2025 Net sales $ 3,330.2 $ 3,104.2 $ 6,687.4 $ 6,220.2 Cost of goods sold 2,319.0 2,162.0 4,664.8 4,354.2 Gross profit 1,011.2 942.2 2,022.6 1,866.0 Fulfillment costs 365.8 360.3 723.7 706.7 Share-based compensation expense and related taxes 85.9 79.1 159.3 157.1 Depreciation and amortization 39.7 32.1 76.7 62.1 Other selling, general, and administrative expenses 213.0 200.4 421.5 399.1 Advertising and marketing expenses 214.8 200.6 420.9 394.4 Income tax provision 31.4 12.0 67.9 27.5 Interest and other income, net (19.9) (4.3) (22.7) (5.3) Net income $ 80.5 $ 62.0 $ 175.3 $ 124.4 The CODM reviews assets on a consolidated basis as presented on our condensed consolidated balance sheets. …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing