Chewy shares fall 8.6% despite beating Q2 revenue and profit estimates due to weak free cash flow.

Chewy Inc reported Q2 revenue of $3.33 billion and adjusted earnings per share of $0.36, both surpassing analyst expectations. Adjusted EBITDA rose 23.7% to $226.7 million, with margins improving, yet free cash flow dropped 15.5% to $89.5 million, missing forecasts. Active customers increased 3.8% to 21.7 million. Analysts noted that while core business remains stable and investments in new markets and AI show promise, the profit beat was partly due to one-time factors, and future returns from these investments remain uncertain.