CHWY

MKT CAP $2KP/E 33.8DIV YIELD —FCF YIELD 25441110.61%REV TTM $13.1B +5.9%NET INCOME $273.7M +81.1%NET CASH $19.3M52W 17.51 – 35.37NEXT EARNINGS Dec 9 EST.SEC XBRL · TTM TO Invalid Date

How CHWY rewrote its risk factors

10-K ITEM 1A · FY2025 → FY2026

Text kept

81%

of sentences unchanged

Added

new sentences

Dropped

sentences removed

Length

+109

words, now 9,493

New in FY2026

These risks are more fully described in this “Risk Factors” section, including the following: Risks Related to Our Business and Operations • Our recent growth rates may not be sustainable or indicative of our future growth and we may not be able to successfully manage challenges to our future growth. • Business disruptions and responsive actions may adversely affect our business operations, financial performance, liquidity and cash flow for an unknown period of time. • If we fail to acquire and retain new customers, or fail to do so in a cost-effective manner, we may be unable to increase net sales, improve margins, and maintain profitability. • If we fail to manage our growth effectively, our business, financial condition and results of operations could be materially and adversely affected. • Our continued success is in part dependent on positive perceptions of the Company. • Our operating expenses may increase over the next few years, and we may generate operating losses as we continue to expand our business. • We may be unable to accurately forecast net sales and appropriately plan our expenses in the future. • Our estimate of the size of our addressable markets may prove to be inaccurate. • We may be unable to source additional suppliers or strengthen our existing relationships with suppliers.
Any significant interruptions or delays in service on our websites or mobile applications or any undetected errors or design faults could result in limited capacity, reduced demand, processing delays, and loss of customers or suppliers. • Disruptions to software-as-a-service (“SaaS”) technologies from third parties may adversely affect our business, financial condition and results of operations. • Our failure or the failure of third-party service providers to protect our websites, networks, and systems against cybersecurity incidents, or to otherwise protect our confidential information, could damage our reputation and brand and harm our business, financial condition and results of operations. • Safety, quality, and health concerns regarding our products could affect our business, financial condition and results of operations. • Risks associated with our suppliers and our outsourcing partners, some of which are located outside of the United States (“U.S.”), could materially and adversely affect our business, financial condition and results of operations. • We are subject to extensive laws and regulations and we may incur material liabilities or costs related to complying with existing or future laws and regulations, and our failure to comply may result in enforcements, penalties, recalls, and other adverse actions. • We may inadvertently not comply with various laws and regulations covering our pet health business, which may subject us to reprimands, sanctions, probations, fines, suspensions, or the loss of one or more of our licenses. • Resistance from veterinarians to authorize prescriptions, or their efforts to discourage pet owners from purchasing from us, could cause our sales to decrease and could adversely affect our business, financial condition and results of operations. • Failure to comply with laws and regulations relating to privacy, data protection, cybersecurity, marketing and advertising and consumer protection, could adversely affect our business, financial condition and results of operations. • Our ability to utilize net operating loss and tax credit carryforwards, and other tax attributes may be subject to certain limitations. • We may be unable to adequately protect our intellectual property rights.
Any of these factors and others not listed could cause our net sales growth to remain flat or decline and may adversely affect our margins and profitability.
Our operations and supply chain could be disrupted by natural or man-made disasters including severe weather, hurricanes, earthquakes, floods, fires, power or water shortages, telecommunications failures, materials scarcity and price volatility, terrorism, civil unrest, conflicts or wars, government shutdowns, and health epidemics or pandemics.
If there are changes in the usage and functioning of search engines or decreases in consumer use of search engines, for example, as a result of the continued development of AI technologies, this could negatively impact our websites.
The growth of our business depends on our ability to accurately predict and timely respond to consumer trends, and meet the requirements of our customers, by successfully introducing new products and services, improving and repositioning our existing products and services and expanding into new offerings.
Our continued success is in part dependent on positive perceptions of the Company.
Additionally, there is an increasing focus from some regulators, investors, and other stakeholders on corporate responsibility and sustainability matters.
To the extent our products and services create concerns related to these matters, our reputation may be harmed.
If we are unable to attract and retain suppliers, we may be unable to maintain or expand our supplier network, which would negatively impact our business.
In addition, in our experience, it can be challenging to persuade pet food buyers to switch to a different product, which could make it difficult to retain certain customers if we lose a pet food supplier, thereby exacerbating the negative impact of such loss on our business, financial condition and results of operations.
If any premium pet food manufacturers were to make premium pet food products more widely available in supermarkets or through mass merchants, or if the premium brands currently available to supermarkets and mass merchants were to increase their market share at the expense of the premium brands sold only through specialty pet food and supplies retailers, our ability to attract and retain customers and our competitive position may suffer.
These conditions may disrupt our suppliers and logistics providers and other third-party delivery agents, as their workers may be unable to report to work and transporting products within regions or countries may be limited due to extended holidays, factory closures, port closures, labor disputes, and increased border controls and closures, among other things.
These actions or other actions that we may take in response to unforeseen circumstances that have the effect of delaying or canceling orders could negatively impact our customers’ experience and our ability to maintain, protect or enhance our brand.
We have added and may continue to add additional fulfillment center capacity as our business continues to grow and our offerings expand.
There is no guarantee that any new fulfillment center will achieve our desired level of efficiency in a reasonable amount of time, or at all.
We expect AI technologies to become increasingly important to e-commerce businesses.
As our competitors develop and expand their strategic use of AI, our operations and profitability could be adversely impacted if we fail to utilize those technologies.
We continually consider whether to upgrade existing technologies (including AI) and business applications and we may be required to implement new technologies in the future.
We currently accept payments using a variety of methods, including credit card, debit card, PayPal, Apple Pay, BNPL, and gift cards and may offer new payment options over time.
In the future, as we offer new payment options to consumers, including by way of integrating emerging mobile and other payment methods, we may be subject to additional regulations, compliance requirements and the potential for fraud.
In addition, the laws relating to gift card breakage and unclaimed property are complex and vary by state.
If one or more states change their laws or successfully challenge our interpretation or application of these laws to our gift cards, or if our assumptions regarding breakage or unclaimed property obligations prove incorrect, our liabilities associated with unredeemed gift cards could increase, which could adversely affect our financial condition and results of operations.
While we have business continuity arrangements in place, our preparations may not be adequate to account for disasters or similar events that may occur in the future and may not effectively permit us to continue operating in the event of any problems with respect to our systems or those of our third-party data centers or any other third-party facilities.
The integration of AI technologies into our operations could also increase cybersecurity and privacy risks and could lead to potential unauthorized access, misuse, acquisition, release, disclosure, alteration or destruction of company or customer data or other confidential or proprietary information.
Further, threat actors may leverage AI technologies to launch more sophisticated, automated, targeted and coordinated attacks that are more difficult to detect.
These risks have become more pronounced since governmental authorities throughout the U.S. and around the world are devoting more attention to data privacy and security issues.

Gone since FY2025

These risks are more fully described in this “Risk Factors” section, including the following: Risks Related to Our Business and Operations • Our recent growth rates may not be sustainable or indicative of our future growth and we may not be able to successfully manage challenges to our future growth. • Business disruptions and responsive actions may adversely affect our business operations, financial performance, liquidity and cash flow for an unknown period of time. • If we fail to acquire and retain new customers, or fail to do so in a cost-effective manner, we may be unable to increase net sales, improve margins, and maintain profitability. • If we fail to manage our growth effectively, our business, financial condition and results of operations could be materially and adversely affected. • Our continued success is largely dependent on positive perceptions of the Company. • Our operating expenses may increase over the next few years, and we may generate operating losses as we continue to expand our business. • We may be unable to accurately forecast net sales and appropriately plan our expenses in the future. • Our estimate of the size of our addressable markets may prove to be inaccurate. • We may be unable to source additional suppliers or strengthen our existing relationships with suppliers.
Any significant interruptions or delays in service on our websites or mobile applications or any undetected errors or design faults could result in limited capacity, reduced demand, processing delays, and loss of customers or suppliers. • Disruptions to software-as-a-service (“SaaS”) technologies from third parties may adversely affect our business, financial condition and results of operations. • Our failure or the failure of third-party service providers to protect our websites, networks, and systems against cybersecurity incidents, or to otherwise protect our confidential information, could damage our reputation and brand and harm our business, financial condition and results of operations. • Safety, quality, and health concerns regarding our products could affect our business, financial condition and results of operations. • Risks associated with our suppliers and our outsourcing partners, many of which are located outside of the United States (“U.S.”), could materially and adversely affect our business, financial condition and results of operations. • We are subject to extensive laws and regulations and we may incur material liabilities or costs related to complying with existing or future laws and regulations, and our failure to comply may result in enforcements, penalties, recalls, and other adverse actions. • We may inadvertently not comply with various laws and regulations covering our pet health business, which may subject us to reprimands, sanctions, probations, fines, suspensions, or the loss of one or more of our licenses. • Resistance from veterinarians to authorize prescriptions, or their efforts to discourage pet owners from purchasing from us, could cause our sales to decrease and could adversely affect our business, financial condition and results of operations. • Failure to comply with laws and regulations relating to privacy, data protection, cybersecurity, marketing and advertising and consumer protection, could adversely affect our business, financial condition and results of operations. • Our ability to utilize net operating loss and tax credit carryforwards, and other tax attributes may be subject to certain limitations. • We may be unable to adequately protect our intellectual property rights.
Any of these factors and others not listed could cause our net sales growth to decline and may adversely affect our margins and profitability.
Our operations and supply chain could be disrupted by natural or man-made disasters including severe weather, hurricanes, earthquakes, floods, fires, power or water shortages, telecommunications failures, materials scarcity and price volatility, terrorism, civil unrest, conflicts or wars, and health epidemics or pandemics.
If there are changes in the usage and functioning of search engines or decreases in consumer use of search engines, for example, as a result of the continued development of AI technology, this could negatively impact our websites.
The growth of our business depends on our ability to accurately predict and timely respond to consumer trends, successfully introduce new products and services, improve existing products and services and expand into new offerings.
Our growth also depends on our ability to meet the requirements of our customers and the needs of their pets by successfully introducing new products and services, improving and repositioning our existing products and services and expanding into new offerings.
These factors contribute to our ability to predict and respond to evolving consumer trends, demands and preferences.
Our continued success is largely dependent on positive perceptions of the Company.
Additionally, there is an increasing focus from some regulators, investors, and other stakeholders on environmental, social, and governance (“ESG”) matters.
To the extent our products and services create ESG-related concerns, our reputation may be harmed.
If we are unable to attract and retain suppliers, we may be unable to maintain and/or expand our supplier network, which would negatively impact our business.
In addition, in our experience, it is challenging to persuade pet food buyers to switch to a different product, which could make it difficult to retain certain customers if we lose a pet food supplier, thereby exacerbating the negative impact of such loss on our business, financial condition and results of operations.
If any premium pet food manufacturers were to make premium pet food products widely available in supermarkets or through mass merchants, or if the premium brands currently available to supermarkets and mass merchants were to increase their market share at the expense of the premium brands sold only through specialty pet food and supplies retailers, our ability to attract and retain customers and our competitive position may suffer.
These conditions may disrupt our suppliers and logistics providers and other third-party delivery agents, as their workers may be unable to report to work and transporting products within regions or countries may be limited due to extended holidays, factory closures, port closures and increased border controls and closures, among other things.
These actions or other actions that we may take in response to unforeseen circumstances that have the effect of delaying or canceling orders could negatively impact our ability to maintain, protect or enhance our brand.
We may add additional fulfillment center capacity as our business continues to grow and our offerings expand.
We continually consider whether to upgrade existing technologies and business applications and we may be required to implement new technologies such as those related to artificial intelligence (“AI”) in the future.
We currently accept payments using a variety of methods, including credit card, debit card, PayPal, Apple Pay, and gift cards and may offer new payment options over time.
In the future, as we offer new payment options to consumers, including by way of integrating emerging mobile and other payment methods, we may be subject to additional regulations, compliance requirements and fraud.
While we have some limited business continuity arrangements in place, our preparations may not be adequate to account for disasters or similar events that may occur in the future and may not effectively permit us to continue operating in the event of any problems with respect to our systems or those of our third-party data centers or any other third-party facilities.
The integration of AI into our operations could also increase cybersecurity and privacy risks and could lead to potential unauthorized access, misuse, acquisition, release, disclosure, alteration or destruction of company or customer data or other confidential or proprietary information.
Further, threat actors may leverage AI technology to launch more sophisticated, automated, targeted and coordinated attacks that are more difficult to detect.
This is more so since governmental authorities throughout the U.S. and around the world are devoting more attention to data privacy and security issues.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2025 ↗, FY2026 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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