Chewy Sees $50 Million AI Cost Savings in Fiscal 2027

PYMNTS reported that Chewy projects artificial intelligence will cut costs by approximately $50 million in fiscal 2027. The company noted on its earnings call that this amount exceeds the low tens of millions of dollars saved in the current year.

CEO Sumit Singh expressed high confidence in these estimates, explaining that the reductions stem from customer service, pharmacy, and veterinary care. New AI tools assist service agents in finding answers, checking pharmacy data, and scheduling visits at Chewy Vet Care clinics.

The firm also pointed to its new customer assistant, Cai. Although active for under a month, the tool has engaged fewer than 15% of Chewy’s users. Singh observed that about 30% of Cai conversations conclude without human intervention. Furthermore, over half of Chewy’s volume now moves through automated facilities, a factor that aided the quarter’s SG&A leverage.

Singh made clear that these savings do not represent a separate margin improvement. He advised analysts against adding the $50 million to Chewy’s fiscal 2026 margin trajectory. Instead, he stated that portions of the savings will counteract typical cost pressures, such as wage inflation, while the remainder could be allocated to growth efforts including marketing and new products.