Artificial intelligence (AI) and automation helped lift sales at Chewy in its fiscal Q2 2026.
CEO Sumit Singh said Chewy’s “increasingly AI-enabled productivity” helped drive overall efficiency for the retailer in Q2. Meanwhile, chief financial officer Chris Deppe explained that more than half of Chewy’s sales volume is “flowing through automated states.”
“As our automated facilities continue to scale and utilization improves, we are leveraging the fixed cost infrastructure embedded within the network while also reducing variable costs through automation, process improvements and AI-enabled tools,” Deppe said.
Singh added that Chewy’s new AI-powered assistant, Cai, can automate returns and refunds.
He said Chewy has “multiple agents that sit under an orchestrator that essentially allow us to direct customer traffic to bring back the appropriate response and self-help.”
Specifically, Singh called Cai “suited to consumers that are propensed towards self-help,” which he characterized as “younger cohorts that continue to become a large portion of our consumer base.”
Chewy is No. 10 in the Top 1000 Database. The market research tool tracks North America’s largest online retailers, ranking them by annual ecommerce sales and more.
Chewy is also No. 190 in Digital Commerce 360’s new AI Rankings. That set of rankings is available in the Top 1000 Pro with AI Database.
Chewy sales in fiscal Q2 2026
In its fiscal Q2 2026, Chewy net sales reached $3.33 billion. That was 7.3% growth from $3.10 billion the prior year.
Excluding the impact of SmartPak Equine and Modern Animal, Chewy Q2 sales increased 5.7% year over year. The online retailer attributed that growth to an increase in customers and net sales per active customer (NSPAC).
Chewy closed its acquisition of SmartPak Equine in Q1. During Q2, Chewy closed on its deal to acquire Modern Animal.
Chewy ended its fiscal Q2 with 21.7 million active customers. That was 3.8% more than the prior year. Chewy NSPAC increased to $602.
Autoship customer sales also outpaced overall Chewy growth in Q2. In Q2, Chewy Autoship increased 9.3% and represented 84.6% of total sales.
“Importantly, our customer funnel remains healthy,” Singh said. “We continue to add customers, improve retention, reactivate lapsed customers and deepen engagement across the Chewy ecosystem.”
Singh said Chewy’s fresh and frozen products saw triple-digit unit growth in Q2, outpacing sales from its broader category of products. Meanwhile, Chewy’s farm and exotics segment had its seventh consecutive quarter of mid-double-digit year-over-year sales growth in Q2.
“Taken together, this momentum demonstrates the breadth of growth opportunities across the Chewy ecosystem and our ability to capitalize on them without relying solely on a recovery in the broader pet market,” Singh said.
Chewy’s AI strategy in Q2
Singh described Chewy’s AI strategy in Q2 as progressing from developing the capabilities to scaling deployment and measurable financial impact.
He noted three areas in which Chewy made progress deploying AI in Q2:
- improving customer experience
- increasing employee productivity
- structurally lowering cost to serve
For customer service, Chewy launched Cai as an assistant for a select group of customers using the retailer’s mobile app. Early results show that Cai has resolved about 30% of chats through self-service across orders, returns, Autoship and account management, Singh shared. He added that Chewy has exposed less than 15% of its traffic to Cai, which has been live for less than a month.
Chewy is also deploying AI tools for customer care, pharmacy and vet care. Within customer care, Chewy has launched “agent-facing AI capabilities, which are helping transform customer signals into intelligent insights, reducing burden on agents and increasing team member productivity,” Singh explained.
Meanwhile, in its pharmacy business, Chewy is using AI to automate data extraction and validation.
At some Chewy Vet Care locations, the retailer has launched an AI assistant called Callie to help with appointment confirmations, scheduling and routine follow-ups.
Singh said these AI initiatives are beginning to translate into tangible financial benefits for Chewy. He said Chewy expects AI-related initiatives to save the retailer tens of millions of dollars in costs in its fiscal 2026. By the end of its fiscal 2027, it anticipates about $50 million in AI-related cost savings.
Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s our last update on Chewy sales.
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