Chewy adds customers, ties AI push closer to vet care
Bottom line
Chewy reported a strong second quarter for fiscal 2026, adding 208,000 net active customers and ending the period with 21.7 million active customers, while growing net sales 7.3% year over year to $3.33 billion. The company also raised its full-year outlook and said it’s leaning harder into AI across customer service, pharmacy, and Chewy Vet Care. On its September 9 earnings call, Chewy said its new AI tools include Kai, a chat assistant now live for a select group of app users, and Callie, a voice tool being used at select Chewy Vet Care sites for appointment confirmations, scheduling, and routine follow-ups. Management said those AI efforts should produce low tens of millions of dollars in savings in fiscal 2026, scaling to about $50 million on an annualized basis in fiscal 2027. (sec.gov)
Why it matters: For veterinary professionals, the bigger signal isn’t just Chewy’s customer growth. It’s that the company is using AI to tighten the connection between retail, pharmacy, and veterinary services at the same time Chewy Vet Care and Modern Animal are expanding. Chewy said its total clinic portfolio posted triple-digit revenue growth in the quarter, and management framed vet care as part of a broader health ecosystem designed to improve retention, increase wallet share, and lower service costs through automation. That could mean more competition for routine scheduling, pharmacy adherence, and ongoing client engagement, especially as pet parents grow more comfortable with digital-first care touchpoints. (stockanalysis.com)
What to watch: Watch how quickly Chewy expands Kai and Callie beyond pilot use cases, and whether those tools start changing pharmacy workflows, appointment volume, or client expectations around veterinary access. (stockanalysis.com)
Chewy used its second-quarter fiscal 2026 results to send two messages at once: customer growth has returned, and AI is moving from concept to operating tool. The online pet retailer added 208,000 net active customers in the quarter, bringing its total to 21.7 million, while net sales rose 7.3% year over year to $3.33 billion. At the same time, the company raised its full-year revenue and profitability outlook and said AI is now being deployed across customer experience, team productivity, and cost-to-serve reduction. (sec.gov)
That update builds on a longer strategy Chewy has been laying out around recurring revenue, health services, and deeper integration with veterinary care. Autoship represented 84.6% of total net sales in the quarter, underscoring how much of Chewy’s business now depends on predictable repeat purchasing rather than one-off transactions. The company has also been broadening its health footprint through Chewy Vet Care, its Modern Animal acquisition, pharmacy, veterinary diets, supplements, insurance, and tele-triage offerings. In a separate investor presentation earlier this year, Chewy argued that these health-related and regulated categories make it more defensible in an AI-shaped commerce environment, not less. (stockanalysis.com)
The new details matter because Chewy is no longer talking about AI in abstract terms. CEO Sumit Singh said Kai, the company’s AI-powered assistant, has been launched to a select group of customers in the mobile app, with early results showing about 30% of chats resolved through self-service for common needs such as orders, returns, Autoship, and account management. Chewy is also using AI tools internally in customer care and pharmacy, where management said automation is helping with data extraction, validation, review consistency, and agent productivity. At select Chewy Vet Care locations, Callie, a voice-based AI capability, is handling appointment confirmations, scheduling, and routine follow-ups. (stockanalysis.com)
Financially, Chewy is presenting those tools as a meaningful efficiency lever, not just a customer-experience upgrade. The company said AI-related initiatives should generate low tens of millions of dollars in savings in fiscal 2026 and about $50 million on an annualized basis in fiscal 2027. CFO Chris Deppe also tied margin improvement to lower variable cost to serve, improved fulfillment utilization, automation, process improvements, and AI-enabled tools. Chewy raised its fiscal 2026 net sales outlook to $13.46 billion to $13.57 billion, and analysts highlighted the stronger profitability view after the quarter. (stockanalysis.com)
Industry and investor reaction has focused on whether Chewy can turn those operational gains into durable margin expansion without losing its high-touch service reputation. On the earnings call, Singh emphasized that customers who want a human are still routed to a care team member quickly, and he described Chewy’s AI stack as largely first-party built. Analysts also pressed management on how much of the savings will drop to the bottom line versus being reinvested into growth, and management’s answer suggested both: some savings will offset cost pressure, while some may be used to support marketing, customer acquisition, and ecosystem expansion. (stockanalysis.com)
Why it matters: For veterinary professionals, Chewy’s update is another sign that large pet health platforms are trying to own more of the routine relationship with pet parents, from reminders and refills to scheduling and follow-up. That doesn’t mean AI replaces clinical care, but it can make preventive and transactional touchpoints faster, cheaper, and more consistent. If Chewy succeeds, pet parents may increasingly expect consumer-grade digital communication from veterinary providers, including easier scheduling, proactive reminders, seamless pharmacy support, and faster answers to basic service questions. Independent practices and corporate groups alike may need to think less about AI as a distant trend and more about where automation can reduce friction without weakening trust. (stockanalysis.com)
There’s also a competitive angle. Chewy said its total clinic portfolio delivered triple-digit revenue growth in the quarter, and management said Modern Animal is performing ahead of expectations. Combined with Chewy’s pharmacy scale and high Autoship penetration, that gives the company multiple ways to keep pet parents inside its ecosystem. For veterinarians, especially those competing on convenience-sensitive services, that could translate into more pressure around refill capture, routine follow-up, and client retention. (stockanalysis.com)
What to watch: The next key question is scale. Chewy’s AI tools are still limited in rollout, but the company accelerated deployment timing and is signaling confidence in broader adoption. Over the next few quarters, watch whether Kai expands beyond basic service tasks, whether Callie spreads to more Chewy Vet Care sites, and whether Chewy begins connecting those tools more tightly to pharmacy, preventive care, and clinic utilization. If that happens, the company’s AI push could become as much a veterinary market story as a retail one. (investing.com)