Pet spending doesn’t slow down the way other consumer categories do. That’s not a guess — it’s a pattern that keeps showing up in the data, quarter after quarter, even when the broader consumer is under pressure.

Which is why Chewy, Inc. (NYSE: CHWY) deserves a harder look right now. The company reports Q1 fiscal 2026 results on June 10. And the story heading into that number is more interesting than the stock price suggests.

The Business, Right Now

Chewy closed fiscal year 2025 with $12.6 billion in net sales — up 8.3% on a normalized 52-week basis. Adjusted EBITDA came in at $719.2 million, an increase of nearly $149 million year over year, with adjusted EBITDA margin expanding 90 basis points to 5.7%. Those aren’t flashy numbers. But they’re consistent, and consistency in this environment is underrated.

The more interesting figure is Autoship. Autoship customer net sales now represent roughly 85% of total revenue — a recurring, subscription-style revenue base that most e-commerce companies would trade almost anything to have. It’s the kind of model that makes the top line predictable in ways that matter when consumer sentiment gets choppy.

Active customers reached nearly 21 million in Q2 fiscal 2025, with net sales per active customer climbing to $591. Both metrics grew 4.5% year over year. The customer base isn’t just holding — it’s deepening.

The Move That Changes the Thesis

Here’s where it gets interesting. In April 2026, Chewy announced a $500 million acquisition of Modern Animal — a technology-forward veterinary platform operating 29 owned clinics, 24/7 virtual care, and a high-retention membership model with more than 100,000 member families.

The deal is expected to add over $125 million in annualized revenue and instantly scale Chewy Vet Care from 18 locations to 47 nationwide. Modern Animal’s mature clinics generate EBITDA margins exceeding 20% — more than twice the revenue per location of the industry average. That’s not a distressed asset. That’s a high-performing operator being absorbed into a much larger distribution platform.

Slight tangent, but it’s worth noting: the veterinary services market sits at approximately $40 billion and is growing at roughly 5% annually. Online penetration in pet healthcare is still only in the mid-teens — food and supplies are nearing 40% online penetration after years of e-commerce growth. Healthcare is 5 to 8 years behind. That gap is the opportunity.

Chewy also authorized a $500 million increase to its share repurchase program alongside the acquisition announcement. Both moves together signal that management is playing offense, not defense.

What to Watch on June 10

Analysts are expecting Q1 2026 revenue of approximately $3.36 billion and EPS of $0.43. The company’s own guidance pointed to a range of $3.3 to $3.4 billion. Given that Chewy has exceeded the high end of its guidance range in multiple consecutive quarters, the bar isn’t unreasonable.

What matters more than the top line is the margin trajectory and any updated commentary around the Modern Animal integration. If EBITDA margins continue expanding and management offers clarity on the vet care rollout, the quarter could shift how the market is thinking about the healthcare segment’s contribution over the next two to three years.

The Risks Are Real

This isn’t a clean story. Net margin remains thin at 1.8%. The EPS comparison looks soft on a GAAP basis, largely because fiscal 2024 had 53 weeks versus 52. Integrating a veterinary platform at scale is operationally complex, and clinic economics take time to mature. The stock has declined roughly 12% over the past month heading into earnings.

There’s also a macro variable worth watching. Chewy’s customer base has proven resilient through prior cycles, but a sustained pullback in discretionary pet spending — premium food, elective vet visits — could pressure the very categories the company is leaning into. It hasn’t happened yet. Whether it does may depend on how the next few months of consumer data come in.

What’s interesting is how few people are connecting the Autoship flywheel to the healthcare expansion. Chewy holds an estimated 40 to 42% share of the pet e-commerce market. It has 21 million active customers already in the ecosystem. Adding veterinary clinics, telehealth, and prescription delivery on top of that isn’t just a new revenue line — it could fundamentally change the lifetime value of every customer already on the platform.

That’s the bet. June 10 is the next data point.