Chewy Inc.
06/10/2026 | Press release | Distributed by Public on 06/10/2026 05:31
Quarterly Report for Quarter Ending May 3, 2026 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements and related notes thereto included in this Quarterly Report on Form 10-Q for the quarterly period ended May 3, 2026 ("10-Q Report") and our audited consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the fiscal year ended February 1, 2026 ("10-K Report"). This discussion contains forward-looking statements that involve risks and uncertainties. As a result of many factors, such as those set forth under the "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" sections herein and in our 10-K Report, our actual results may differ materially from those anticipated in these forward-looking statements. Unless the context requires otherwise, references in this 10-Q Report to "Chewy," the "Company," "we," "our," or "us" refer to Chewy, Inc. and its consolidated subsidiaries.
Investors and others should note that we may announce material information to our investors using our investor relations website (https://investor.chewy.com/), filings with the SEC, press releases, public conference calls and webcasts. We use these channels, as well as social media, to communicate with our investors and the public about our company, our business and other issues. It is possible that the information that we post on these channels could be deemed to be material information. We therefore encourage investors to visit these websites from time to time. The information contained on such websites and social media posts is not incorporated by reference into this filing. Further, our references to website URLs in this filing are intended to be inactive textual references only.
Overview
We are the largest pet e-tailer in the United States, offering virtually every product a pet needs. We launched Chewy in 2011 to bring the best of the neighborhood pet store shopping experience to a larger audience, enhanced by the depth and wide selection of products and services, as well as the around-the-clock convenience, that only e-commerce can offer. We believe that we are the preeminent destination for pet parents as a result of our broad selection of high-quality products and expanded menu of service offerings, which we offer at great prices and deliver with an exceptional level of care and a personal touch. We are the trusted source for pet parents and partners and continually develop innovative ways for our customers to engage with us. We partner with approximately 4,000 of the best and most trusted brands in the pet industry, and we create and offer our own outstanding private brands. Through our websites and mobile applications, we offer our customers approximately 190,000 products, compelling merchandising, an easy and enjoyable shopping experience, and exceptional customer service.
Macroeconomic Considerations
Macroeconomic conditions, including inflationary pressures, elevated interest rates, and broader economic uncertainty, have influenced consumer spending patterns and may continue to affect demand across our categories. We monitor these conditions closely and adjust elements of our logistics, transportation, supply chain, and merchandising strategies as appropriate. Changes in consumer behavior may impact product mix, purchasing frequency, and promotional intensity, and we manage our operations with a focus on maintaining value, service levels, and operational discipline in varying economic environments.
We are unable to predict the duration and ultimate impact of evolving macroeconomic conditions on the broader economy or our operations and liquidity. As such, macroeconomic risks and uncertainties remain. Refer to the section titled "Cautionary Note Regarding Forward-Looking Statements" in this 10-Q Report and the section titled "Risk Factors" in Item 1A of our 10-K Report for the fiscal year ended February 1, 2026.
Fiscal Year End
We have a 52- or 53-week fiscal year ending each year on the Sunday that is closest to January 31 of that year. Our 2026 fiscal year ends on January 31, 2027 and is a 52-week year. Our 2025 fiscal year ended February 1, 2026 and was a 52-week year.
Key Operating Metrics
Active Customers
As of the last date of each reporting period, we determine our number of active customers by counting the total number of individual customers who have ordered a product or service, and for whom a product has shipped or for whom a service has been provided, at least once during the preceding 364-day period. The change in active customers in a reporting period captures both the inflow of new customers and the outflow of customers who have not made a purchase in the last 364 days. We view the
number of active customers as a key indicator of our growth, ability to acquire and retain customers as a result of our marketing efforts, and the value we provide to our customers. The number of active customers has grown over time as we acquired new customers and retained previously acquired customers.
Net Sales Per Active Customer
We define net sales per active customer as the aggregate net sales for the preceding four fiscal quarters, divided by the total number of active customers at the end of that period. We view net sales per active customer as a key indicator of our customers' purchasing patterns, including their initial and repeat purchase behavior.
Autoship and Autoship Customer Sales
We define Autoship customers as customers in a given fiscal quarter that had an order shipped through our Autoship subscription program during the preceding 364-day period. We define Autoship as our subscription program, which provides automatic ordering, payment, and delivery of products to our customers. We view our Autoship subscription program as a key driver of recurring net sales and customer retention. For a given fiscal quarter, Autoship customer sales consist of sales and shipping revenues from all Autoship subscription program purchases and purchases outside of the Autoship subscription program by Autoship customers, excluding taxes collected from customers, excluding any refunds, and net of any promotional offers (such as percentage discounts off current purchases and other similar offers) for that quarter. For a given fiscal year, Autoship customer sales equal the sum of the Autoship customer sales for each of the fiscal quarters in that fiscal year.
Autoship Customer Sales as a Percentage of Net Sales
We define Autoship customer sales as a percentage of net sales as the Autoship customer sales in a given reporting period divided by the net sales from all orders in that period. We view Autoship customer sales as a percentage of net sales as a key indicator of our recurring sales and customer retention.
Components of Results of Consolidated Operations
Net Sales
We derive net sales primarily from sales of both third-party brand and private brand pet food, pet products, pet health and specialty products, and related shipping fees. Consumable products include retail pet food and veterinary diet products. Hard goods products include non-perishable pet supplies. Pet health and specialty products include prescription medications, non-prescription pet health care products and certain specialty animal products for categories such as equine, birds, fish, and other non-traditional pets. Other net sales include private brand sales and certain pet-related services including telehealth services, pet insurance-related offerings, loyalty program memberships, and veterinary clinic services. Revenues from these service-based offerings are not a significant component of net sales and are managed as part of the Company's integrated platform rather than as standalone service offerings.
Sales of third-party brand and private brand pet food, pet products, pet health and specialty products, and shipping revenues are recorded when products are shipped, net of promotional discounts and refunds and allowances. Taxes collected from customers are excluded from net sales. Net sales is primarily driven by growth of new customers and active customers, and the frequency with which customers purchase and subscribe to our Autoship subscription program.
We also periodically provide promotional offers, including discount offers, such as percentage discounts off current purchases and other similar offers. These offers are treated as a reduction to the purchase price of the related transaction and are reflected as a net amount in net sales.
Cost of Goods Sold
Cost of goods sold consists of the cost of third-party brand and private brand products sold to customers, inventory freight, shipping supply costs, inventory shrinkage costs, and inventory valuation adjustments, offset by reductions for promotions and percentage or volume rebates offered by our vendors, which may depend on reaching minimum purchase thresholds. Generally, amounts received from vendors are considered a reduction of the carrying value of inventory and are ultimately reflected as a reduction of cost of goods sold.
Selling, General and Administrative
Selling, general and administrative expenses consist of fulfillment costs incurred in operating and staffing fulfillment centers, customer service centers, and veterinary clinics; payroll and related expenses for employees involved in general corporate functions, including accounting, finance, tax, legal and human resources; costs associated with the use of facilities and equipment, such as depreciation expense and rent; share-based compensation, professional fees and other general corporate costs.
Fulfillment costs include costs attributable to buying, receiving, inspecting and warehousing inventories, picking, packaging and preparing customer orders for shipment, payment processing, providing pet health services, and responding to inquiries from customers. Included within fulfillment costs are merchant processing fees charged by third parties that provide merchant processing services for credit cards.
Advertising and Marketing
Advertising and marketing expenses consist of advertising and payroll related expenses for personnel engaged in marketing, business development and selling activities.
Interest and Other Income (Expense), net
We generate interest income from our cash and cash equivalents and marketable securities. We incur interest expense in relation to our borrowing facilities, finance leases, and unrecognized tax benefits.
Our other income (expense), net consists of changes in the fair value of equity warrants, equity investments, tax indemnification receivables, foreign currency transaction gains and losses, and allowances for credit losses on marketable securities.
Income Tax Provision (Benefit)
Income tax provision (benefit) consists of an estimate of federal and state income taxes based on enacted federal and state tax rates, as adjusted for allowable credits, deductions, and the valuation allowance against deferred tax assets, as applicable.
Non-GAAP Financial Measures
To supplement our GAAP results, we present certain non-GAAP financial measures that management uses to evaluate operating performance, assess liquidity, and inform capital allocation decisions. These measures include Adjusted EBITDA and Adjusted EBITDA margin, Adjusted net income and Adjusted earnings per share, and Free cash flow.
Adjusted EBITDA excludes depreciation and amortization, share-based compensation and related taxes, income tax provision (benefit), interest income (expense), transaction-related costs, changes in the fair value of equity warrants, severance and exit costs, and other items not considered indicative of our core operations. Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of net sales.
Adjusted net income and Adjusted earnings per share exclude certain non-cash and non-recurring items, including share-based compensation and related taxes, releases of valuation allowances associated with deferred tax assets, transaction-related costs, changes in the fair value of equity warrants, and severance and exit costs. Beginning in the first quarter of 2026, Adjusted net income excludes transaction-related costs prospectively.
Free cash flow represents net cash provided by operating activities less capital expenditures.
We believe these measures provide additional insight into the underlying trends in our business and facilitate comparisons across reporting periods. Reconciliations to the most directly comparable GAAP measures are provided below.
These non-GAAP measures have limitations and should not be considered in isolation or as a substitute for GAAP results. For example, Adjusted EBITDA does not reflect capital expenditures, working capital requirements, interest income (expense), income taxes, or share-based compensation, which remains a recurring component of our compensation structure. In addition, other companies may calculate non-GAAP measures differently, which may limit their comparability. Accordingly, these measures should be considered together with our GAAP financial statements and related disclosures.
Key Financial and Operating Data
We measure our business using both financial and operating data and use the following metrics and measures to assess the near-term and long-term performance of our overall business, including identifying trends, formulating financial projections, making strategic decisions, assessing operational efficiencies, and monitoring our business.
| 13 Weeks Ended | |||||||||||||||||
|
(in millions, except net sales per active customer, per share data, and percentages)
|
May 3, 2026 |
May 4, 2025 |
% Change | ||||||||||||||
| Financial and Operating Data | |||||||||||||||||
| Net sales | $ | 3,357.2 | $ | 3,116.0 | 7.7 | % | |||||||||||
|
Net income (1)
|
$ | 94.8 | $ | 62.4 | 51.9 | % | |||||||||||
| Net margin | 2.8 | % | 2.0 | % | |||||||||||||
|
Adjusted EBITDA (2)
|
$ | 253.1 | $ | 192.7 | 31.3 | % | |||||||||||
|
Adjusted EBITDA margin (2)
|
7.5 | % | 6.2 | % | |||||||||||||
|
Adjusted net income (2)
|
$ | 179.9 | $ | 148.9 | 20.8 | % | |||||||||||
|
Earnings per share, basic (1)
|
$ | 0.23 | $ | 0.15 | 53.3 | % | |||||||||||
|
Earnings per share, diluted (1)
|
$ | 0.23 | $ | 0.15 | 53.3 | % | |||||||||||
|
Adjusted earnings per share, basic (2)
|
$ | 0.43 | $ | 0.36 | 19.4 | % | |||||||||||
|
Adjusted earnings per share, diluted (2)
|
$ | 0.43 | $ | 0.35 | 22.9 | % | |||||||||||
| Net cash provided by operating activities | $ | 108.5 | $ | 86.4 | 25.6 | % | |||||||||||
|
Free cash flow (2)
|
$ | 70.8 | $ | 48.7 | 45.4 | % | |||||||||||
| Active customers | 21.497 | 20.756 | 3.6 | % | |||||||||||||
| Net sales per active customer | $ | 597 | $ | 583 | 2.4 | % | |||||||||||
| Autoship customer sales | $ | 2,832.6 | $ | 2,562.7 | 10.5 | % | |||||||||||
| Autoship customer sales as a percentage of net sales | 84.4 | % | 82.2 | % | |||||||||||||
|
(1) Includes share-based compensation expense and related taxes of $73.4 million for the thirteen weeks ended May 3, 2026, compared to $78.0 million for the thirteen weeks ended May 4, 2025.
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(2) Adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted basic and diluted earnings per share, and free cash flow are non-GAAP financial measures. See "Non-GAAP Financial Measures" above.
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We define net margin as net income divided by net sales and adjusted EBITDA margin as adjusted EBITDA divided by net sales.
Adjusted EBITDA and Adjusted EBITDA Margin
The following table presents a reconciliation of net income to adjusted EBITDA, as well as the calculation of net margin and adjusted EBITDA margin, for each of the periods indicated:
|
(in millions, except percentages)
|
13 Weeks Ended | ||||||||||
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Reconciliation of Net Income to Adjusted EBITDA
|
May 3, 2026 | May 4, 2025 | |||||||||
|
Net income
|
$ | 94.8 | $ | 62.4 | |||||||
|
Add (deduct):
|
|||||||||||
| Depreciation and amortization | 37.0 | 30.0 | |||||||||
| Share-based compensation expense and related taxes | 73.4 | 78.0 | |||||||||
| Interest income, net | (2.8) | (3.2) | |||||||||
| Change in fair value of equity warrants | - | 2.6 | |||||||||
| Income tax provision | 36.5 | 15.5 | |||||||||
| Severance costs | - | 5.9 | |||||||||
| Transaction related costs | 9.8 | 0.1 | |||||||||
| Exit costs | 1.9 | - | |||||||||
| Other | 2.5 | 1.4 | |||||||||
| Adjusted EBITDA | $ | 253.1 | $ | 192.7 | |||||||
| Net sales | $ | 3,357.2 | $ | 3,116.0 | |||||||
| Net margin | 2.8 | % | 2.0 | % | |||||||
| Adjusted EBITDA margin | 7.5 | % | 6.2 | % | |||||||
Adjusted Net Income and Adjusted Basic and Diluted Earnings per Share
The following table presents a reconciliation of net income to adjusted net income, as well as the calculation of adjusted basic and diluted earnings per share, for each of the periods indicated:
|
(in millions, except per share data)
|
13 Weeks Ended | ||||||||||
|
Reconciliation of Net Income to Adjusted Net Income
|
May 3, 2026 | May 4, 2025 | |||||||||
| Net income | $ | 94.8 | $ | 62.4 | |||||||
|
Add:
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|||||||||||
| Share-based compensation expense and related taxes | 73.4 | 78.0 | |||||||||
| Change in fair value of equity warrants | - | 2.6 | |||||||||
| Severance costs | - | 5.9 | |||||||||
| Transaction related costs | 9.8 | - | |||||||||
| Exit costs | 1.9 | - | |||||||||
| Adjusted net income | $ | 179.9 | $ | 148.9 | |||||||
|
Weighted-average common shares used in computing earnings per share and adjusted earnings per share:
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|||||||||||
| Basic | 413.8 | 413.7 | |||||||||
|
Effect of dilutive share-based awards
|
5.3 | 11.6 | |||||||||
|
Diluted
|
419.1 | 425.3 | |||||||||
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Earnings per share attributable to common Class A and Class B stockholders
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|||||||||||
| Basic | $ | 0.23 | $ | 0.15 | |||||||
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Diluted
|
$ | 0.23 | $ | 0.15 | |||||||
| Adjusted basic | $ | 0.43 | $ | 0.36 | |||||||
|
Adjusted diluted
|
$ | 0.43 | $ | 0.35 | |||||||
Free Cash Flow
The following table presents a reconciliation of net cash provided by operating activities to free cash flow for each of the periods indicated:
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(in millions)
|
13 Weeks Ended | ||||||||||
| Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow | May 3, 2026 | May 4, 2025 | |||||||||
| Net cash provided by operating activities | $ | 108.5 | $ | 86.4 | |||||||
| Deduct: | |||||||||||
| Capital expenditures | (37.7) | (37.7) | |||||||||
| Free Cash Flow | $ | 70.8 | $ | 48.7 | |||||||
Free cash flow may vary period to period based on the timing and level of capital expenditures, including investments in fulfillment capacity, pharmacy facilities, veterinary clinics, technology infrastructure, and other operational initiatives. Free cash flow may also be affected by changes in working capital, including fluctuations in inventory levels, vendor payment terms, and other components of the cash conversion cycle.
Results of Consolidated Operations
The following tables set forth our results of operations for the periods presented and express the relationship of certain line items as a percentage of net sales for those periods. The period-to-period comparison of financial results is not necessarily indicative of future results:
| 13 Weeks Ended | |||||||||||||||||||||||||||||
| % of net sales | |||||||||||||||||||||||||||||
| (in millions, except percentages) |
May 3, 2026 |
May 4, 2025 |
% Change |
May 3, 2026 |
May 4, 2025 |
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| Consolidated Statements of Operations | |||||||||||||||||||||||||||||
| Net sales | $ | 3,357.2 | $ | 3,116.0 | 7.7 | % | 100.0 | % | 100.0 | % | |||||||||||||||||||
| Cost of goods sold | 2,345.8 | 2,192.2 | 7.0 | % | 69.9 | % | 70.4 | % | |||||||||||||||||||||
| Gross profit | 1,011.4 | 923.8 | 9.5 | % | 30.1 | % | 29.6 | % | |||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||
| Selling, general and administrative | 676.8 | 653.1 | 3.6 | % | 20.2 | % | 21.0 | % | |||||||||||||||||||||
| Advertising and marketing | 206.1 | 193.8 | 6.3 | % | 6.1 | % | 6.2 | % | |||||||||||||||||||||
| Total operating expenses | 882.9 | 846.9 | 4.3 | % | 26.3 | % | 27.2 | % | |||||||||||||||||||||
| Income from operations | 128.5 | 76.9 | 67.1 | % | 3.8 | % | 2.5 | % | |||||||||||||||||||||
| Interest and other income, net | 2.8 | 1.0 | 180.0 | % | 0.1 | % | 0.0 | % | |||||||||||||||||||||
| Income before income tax provision | 131.3 | 77.9 | 68.5 | % | 3.9 | % | 2.5 | % | |||||||||||||||||||||
| Income tax provision (benefit) | 36.5 | 15.5 | 135.5 | % | 1.1 | % | 0.5 | % | |||||||||||||||||||||
| Net income | $ | 94.8 | $ | 62.4 | 51.9 | % | 2.8 | % | 2.0 | % | |||||||||||||||||||
Net Sales
| 13 Weeks Ended | |||||||||||||||||||||||
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(in millions, except percentages)
|
May 3, 2026 |
May 4, 2025 |
$ Change | % Change | |||||||||||||||||||
| Consumables | $ | 2,292.4 | $ | 2,177.9 | $ | 114.5 | 5.3 | % | |||||||||||||||
| Hardgoods | 394.8 | 342.2 | 52.6 | 15.4 | % | ||||||||||||||||||
| Pet health and specialty products | 562.7 | 496.7 | 66.0 | 13.3 | % | ||||||||||||||||||
| Other | 107.3 | 99.2 | 8.1 | 8.2 | % | ||||||||||||||||||
| Net sales | $ | 3,357.2 | $ | 3,116.0 | $ | 241.2 | 7.7 | % | |||||||||||||||
Net sales for the thirteen weeks ended May 3, 2026 increased by $241.2 million, or 7.7%, to $3.4 billion compared to $3.1 billion for the thirteen weeks ended May 4, 2025. This increase was primarily driven by growth in active customers, which improved by 3.6%, to 21.5 million, and higher net sales per active customer, which increased $14, to $597 in the thirteen weeks ended May 3, 2026 compared to the thirteen weeks ended May 4, 2025, driven by growth across our consumables, pet health and specialty products, and hardgoods businesses. On February 2, 2026, the Company completed the acquisition of SmartPak whose net sales were not material for the thirteen weeks ended May 3, 2026 and are included within pet health and specialty products.
Cost of Goods Sold and Gross Profit
Cost of goods sold for the thirteen weeks ended May 3, 2026 increased by $153.6 million, or 7.0%, to $2.3 billion compared to $2.2 billion in the thirteen weeks ended May 4, 2025. This increase was primarily due to higher sales coupled with increased outbound freight and shipping supply costs.
Gross profit for the thirteen weeks ended May 3, 2026 increased by $87.6 million, or 9.5%, to $1,011.4 million compared to $923.8 million in the thirteen weeks ended May 4, 2025. This increase was primarily due to the year-over-year increase in net sales as described above. Gross margin for the thirteen weeks ended May 3, 2026 was 30.1%, an increase of 50 basis points compared to 29.6% for the thirteen weeks ended May 4, 2025, and is driven by growth in sponsored ads and margin growth across our consumables business.
Selling, General and Administrative
Selling, general and administrative expenses for the thirteen weeks ended May 3, 2026 increased by $23.7 million, or 3.6%, to $676.8 million compared to $653.1 million in the thirteen weeks ended May 4, 2025. The majority of the increase is associated with network-wide fulfillment costs, which were collectively incurred to support the overall growth of the business, our pharmacy fulfillment network, and veterinary clinics. This also included an increase in other selling, general, and administrative expenses of $9.61 million attributable to transaction-related costs with the SmartPak acquisition, as well as a modest increase in expanded hosting and software infrastructure requirements.
Advertising and Marketing
Advertising and marketing expenses for the thirteen weeks ended May 3, 2026 increased by $12.3 million, or 6.3%, to $206.1 million compared to $193.8 million in the thirteen weeks ended May 4, 2025. Our marketing expenses increased due to additional investment in our lower and upper funnel marketing channels contributing to new customer acquisition and improved customer retention.
Interest and Other Income (Expense), net
Interest income for the thirteen weeks ended May 3, 2026 decreased by $0.4 million, to $2.8 million compared to interest income of $3.2 million in the thirteen weeks ended May 4, 2025. This decrease was due to a decrease in interest income generated from marketable securities, which matured during the thirteen weeks ended May 4, 2025.
Other expense, net, was nil for the thirteen weeks ended May 3, 2026 compared to other expense, net, of $2.2 million in the thirteen weeks ended May 4, 2025.
Income Tax Provision (Benefit)
Our effective tax rate for the thirteen weeks ended May 3, 2026 was higher than the U.S. federal statutory rate, primarily due to state income taxes and shortfall from share-base compensation partially offset by federal and state research and development credits.
Income tax provision for the thirteen weeks ended May 3, 2026 increased by $21.0 million, to $36.5 million compared to income tax provision of $15.5 million in the thirteen weeks ended May 4, 2025, driven primarily by higher pre-tax income.
Liquidity and Capital Resources
We finance our operations and capital expenditures primarily through cash flows generated by operations. Our principal sources of liquidity are expected to be our cash and cash equivalents, marketable securities, and our revolving credit facility. Cash and cash equivalents consisted primarily of cash on deposit with banks. Cash and cash equivalents totaled $485.2 million as of May 3, 2026, a decrease of $374.9 million from February 1, 2026.
We believe that our cash and cash equivalents, marketable securities, and availability under our revolving credit facility will be sufficient to fund our working capital, capital expenditure requirements, and contractual obligations for at least the next twelve months. In addition, we may choose to raise additional funds at any time through equity or debt financing arrangements, which may or may not be needed for additional working capital, capital expenditures, share repurchases, or other strategic investments. Our opinions concerning liquidity are based on currently available information. To the extent this information proves to be inaccurate, or if circumstances change, future availability of trade credit or other sources of financing may be reduced and our liquidity could be adversely affected. Our future capital requirements and the adequacy of available funds will depend on many factors, including those described in the section titled "Risk Factors" in Item 1A of our 10-K Report for the fiscal year ended February 1, 2026. Depending on the severity and direct impact of these factors on us, we may be unable to secure additional financing to meet our operating requirements on terms favorable to us, or at all.
Cash Flows
| 13 Weeks Ended | |||||||||||
|
($ in millions)
|
May 3, 2026 | May 4, 2025 | |||||||||
| Net cash provided by operating activities | $ | 108.5 | $ | 86.4 | |||||||
| Net cash (used in) provided by investing activities | $ | (228.6) | $ | (41.2) | |||||||
| Net cash used in financing activities | $ | (254.8) | $ | (25.0) | |||||||
Operating Activities
Net cash provided by operating activities was $108.5 million for the thirteen weeks ended May 3, 2026, which primarily consisted of $94.8 million of net income and $115.9 million of non-cash adjustments, including share-based compensation expense of $66.9 million and depreciation and amortization expense of $37.0 million. These amounts were partially offset by working capital changes of $92.8 million, which were primarily driven by a decrease in accrued expenses and other current liabilities, coupled with an increase in accounts receivable and prepaid expenses and other current assets. These changes were partially offset by a decrease in inventories.
Net cash provided by operating activities was $86.4 million for the thirteen weeks ended May 4, 2025, which primarily consisted of $62.4 million of net income, $120.4 million of non-cash adjustments, such as share-based compensation expense of $74.5 million and depreciation and amortization expense of $30.0 million, partially offset by a cash decrease of $88.8 million from working capital. Cash decreases from working capital were primarily driven by a decrease in other current liabilities and an increase in inventories, receivables, and other current assets, partially offset by an increase in payables.
Investing Activities
Net cash used in investing activities was $228.6 million for the thirteen weeks ended May 3, 2026, primarily consisting of $174.8 million for acquisition of SmartPak, and $37.7 million for capital expenditures related to expanding operations at our fulfillment centers, veterinary clinics, and future pharmacy facility capabilities.
Net cash used in investing activities was $41.2 million for the thirteen weeks ended May 4, 2025, primarily consisting of $37.7 million for capital expenditures related to expanding operations at our Houston, Texas fulfillment center, veterinary clinics, and future pharmacy facility capabilities.
Financing Activities
Net cash used in financing activities was $254.8 million for the thirteen weeks ended May 3, 2026 primarily consisting of $200.0 million for repurchases of common stock, and $53.3 million for tax withholdings related to vesting of share-based compensation awards.
Net cash used in financing activities was $25.0 million for the thirteen weeks ended May 4, 2025, primarily consisting of $23.1 million for repurchases of common stock, as well as payments for secondary offering costs, and principal repayments of finance lease obligations.
Other Liquidity Measures
ABL Credit Facility
We have a senior secured asset-based credit facility (the "ABL Credit Facility"), which matures on April 1, 2030 following an amendment entered into on April 1, 2025, and provides for non-amortizing revolving loans in the aggregate principal amount of up to $800 million, subject to a borrowing base comprised of, among other things, inventory and sales receivables (subject to certain reserves). Based on our borrowing base as of May 3, 2026, which is reduced by standby letters of credit, we had $783.1 million of borrowing capacity under the ABL Credit Facility. As of May 3, 2026 and February 1, 2026, we did not have any outstanding borrowings under the ABL Credit Facility, respectively.
Share Repurchase Activity
On May 24, 2024, our Board of Directors authorized the Company to repurchase up to $500 million of its Class A common stock, par value $0.01 per share (the "Class A common stock"), and/or Class B common stock, par value $0.01 per share (the "Class B common stock" and together with the Class A common stock, the "common stock"), pursuant to a share repurchase program (the "Repurchase Program").
On April 7, 2026, the Board of Directors approved an increase of $500 million to the Repurchase Program. The actual timing and amount of any share repurchases remains subject to a variety of factors, including stock price, trading volume, market conditions, compliance with applicable legal requirements, and other general business considerations. We are not required to repurchase any specific dollar amount or to acquire any specific number of shares of common stock. The Repurchase Program has no expiration date and may be modified, suspended, or terminated at any time.
During the thirteen weeks ended May 3, 2026, 7,599,226 shares of Class A common stock were repurchased and subsequently cancelled and retired pursuant to the Repurchase Program for a total cost of $200.0 million, excluding the cost of commissions and excise taxes. The authorized value of shares available to be repurchased under the Repurchase Program excludes the cost of commissions and excise taxes and as of May 3, 2026, the remaining value of shares of common stock that were authorized to be repurchased under the Repurchase Program was $550.0 million. As of May 3, 2026, the total unpaid cost of share repurchases was $1.4 million for excise taxes.
Recent Accounting Pronouncements
Information regarding recent accounting pronouncements is provided in Item 1 of Part I, "Financial Statements (Unaudited) - Note 2 - Basis of Presentation and Significant Accounting Policies - Recent Accounting Pronouncements" and is incorporated by reference herein.
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