The Cost Center That Became the Business

When Sumit Singh arrived at Chewy as COO in 2017, the company was doubling revenue year over year — fiscal 2017 net sales topped $2.1 billion — and still losing money. Customer care reported to him. His first instinct was to treat it like overhead.

"That's entirely the wrong way to think about it," Singh now says, "particularly in a category where empathy matters."

He became CEO the following year and reoriented the operation. Chewy's care reps became known for sending handwritten sympathy cards and flowers to customers grieving a pet. The company built stickiness not through price alone but through the kind of service that generates word-of-mouth in a category — pet ownership — where emotional attachment runs high and trust transfers to vendors.

The results are now visible in the financials. Chewy reported $12.6 billion in net sales for fiscal 2025, with adjusted EBITDA of $718.2 million and net income of $222.8 million. It operates 18 fulfillment centers and five pharmacy hubs, making it the third-largest direct-to-consumer e-commerce network in the U.S.

What the Metrics Actually Measure

Chewy's care operation is structured around a specific set of signals. The company tracks speed to answer, empathy and accuracy of response, first-contact resolution rate, and employee retention. It does not track average handle time or calls answered per shift — the metrics that typically push reps toward speed over quality.

"We try to hire people who are generally happy, healthy pet lovers, and we lightly train them," Singh said. "We give them some basic guidelines around courtesy and empathy, but then we let them be themselves."

The output is what Singh calls "wow moments" — a recent example being a gift box sent to a customer displaced by California wildfires who had relocated to Texas. The package included a Welcome to Texas candle and a hand-painted portrait of her cat, Tofu. These gestures are not scripted; they emerge from a hiring and incentive structure designed to produce them.

Scaling Empathy Without Diluting It

The operational challenge is obvious: maintaining that quality as the company grows. Singh's answer is AI, but with a specific constraint — the goal is personalization at scale, not automation as a cost-reduction play.

Chewy is rolling out a self-service tool that pulls from existing customer data — pet profiles, purchase history, shipping preferences — and generates responses that follow the company's brand guidelines. In an early demo, a customer asked the tool to write a haiku; it produced one featuring the names of her pets by name.

"We're not taking the empathy away," Singh said. "We're making sure that context is interpreted through brand guidelines and data."

Human reps are staying. Singh says they'll retain wide latitude in how they interact with customers, and the company's care metrics won't change.

The Agentic Commerce Question

Singh is watching the rise of AI shopping agents — tools that execute purchases on behalf of consumers, often optimizing for price and convenience over brand loyalty. His read is that Chewy is better positioned than most to survive disintermediation.

The argument has three parts. First, Chewy already competes on price, so bots optimizing for lowest cost are likely to land there anyway. Second, its healthcare business — telehealth, prescription drug sales — operates under regulatory requirements that make it harder for agents to route around. Third, the emotional dimension of pet ownership creates a trust relationship that extends to vendors in ways that don't apply to commodity categories.

"A retailer like Chewy that combines low price, dependable fulfillment, embedded healthcare, and deep customer relationships is not disintermediated," Singh said. "It is advantaged."

One number worth watching: Chewy guided fiscal 2026 net sales of $13.4 to $13.55 billion, down from a prior range of $13.6 to $13.75 billion, citing softer consumer spending. The empathy strategy is durable. The macro isn't.