Wayfair’s Sales fell in the first quarter, but the online furniture retailer narrowed its losses after cutting 13% of its workforce at the start of the year, the company announced Thursday.
Wayfair beat Wall Street expectations for revenue and profit, reporting a nearly 3% increase in active customers compared to the same period last year.
Here’s how Wayfair performed compared to Wall Street’s expectations, based on an analyst survey from LSEG:
- Loss per share: Adjusted 32 cents versus an expected loss of 44 cents
- Revenue: $2.73 billion versus expected $2.64 billion
Wayfair shares closed more than 16% higher on Thursday.
The company’s reported net loss for the three-month period ended March 31 was $248 million, or $2.06 per share, compared with a loss of $355 million, or $3.22 per share share in the previous year. Excluding one-time items, the company lost 32 cents per share.
Revenue fell to $2.73 billion, down more than 1% from $2.77 billion a year earlier. The biggest decline came from Wayfair’s international segment, where sales fell nearly 6% to $338 million compared to the same period last year.
Despite the revenue decline, co-founder and CEO Niraj Shah was upbeat in a press release, saying the quarter “ended on a high note.”
“Shoppers are increasingly choosing Wayfair, with active customer growth once again positive year-over-year and accelerating compared to last quarter,” Shah said.
“For the first time since pre-pandemic, we are seeing suppliers add large groups of new products to their catalogs to fuel the next phase of growth,” he added.
Like some of its other digitally native competitors, Wayfair conducted a series of layoffs after experiencing a sales boom during the pandemic, then contracted as consumers began shopping for new sofas and shelving in exchange for dinner and travel after the Covid-19 pandemic ended to exchange.
In January, the company announced plans to cut 13% of its global workforce, or about 1,650 employees, to downsize its structure and cut costs after “overdoing” hiring during the pandemic, the company previously said. The restructuring – Wayfair’s third implementation since summer 2022 – is expected to save the company about $280 million, it said previously.
Wayfair is still on the path to profitability, but trimmed its losses by $107 million in the first quarter after the company implemented its latest round of job cuts. The company also increased the number of active customers at a time when the home goods sector is under pressure as high interest rates and a weak real estate market weigh on sales.
According to StreetAccount, Wayfair’s active customer count grew 2.8% during the quarter to 22.3 million, slightly above the 22.1 million expected by analysts.
According to StreetAccount, orders in the quarter had an average value of $285, compared to the $275.07 analysts had expected. While average orders were above Wall Street expectations, they fell slightly from the same period last year, when the average order value was $287. That’s due to changes in Wayfair’s unit prices, which were inflated in 2021 and 2022 and began to decline last year, the company said.
Read the full earnings release here.
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2024-05-02 20:28:17
www.cnbc.com
