Wayfair swings to a Q1 loss, stock plummets

BOSTON — The brutal day on Wall Street Thursday was even worse for Wayfair.

The home furnishing e-commerce giant and No. 1 on Home News Now’s 125 ranking reported a first-quarter net loss of $319 million, compared to an $18 million gain for the same period a year ago.

Net revenue for the period ended March 31 fell to $2.99 billion, down 13.9% from $3.48 billion a year ago. Shares closed down nearly 26% to $67.45 per share. The S&P 500, by comparison, was off 3.56%. The tech-heavy Nasdaq closed down nearly 5%.

“While multiple macro cross-currents are filtering through the global economy, consumer health remains relatively strong,” Niraj Shah, CEO, co-founder and co-chairman said in a release. He said consumers are still very interested in the home category and pointed to the success of the company’s recent Way Day event as evidence. It included two of the four largest sales days in the company’s history.

But that was in the second quarter. It didn’t help the first quarter. Here are some more Q1 results:

–U.S. net revenue decreased 9.9% from a year ago to $2.5 billion. International revenue was off 31.4%.

–The earnings per share loss for the quarter was $3.04 compared to a 16-cent gain a year ago. The adjusted earnings loss was $113 million, or $1.96 per share, compared to a $206 million, or $1.00 per share, gain in the first quarter last year.

–Free cash flow moved to a negative $331 million from a positive $112 million.

–Active customers decreased 23.4% to 25.4 million. Repeat customers placed 77.7% of total orders compared to 74.5% a year ago, but the number of their total orders decreased 26% to 8.1 million.

–Average order value increased to $287 from $237.

“We are positioned to outperform and gain share from here, particularly as supply chain constraints ease, and we are not losing sight of the massive market opportunity still ahead,” Shah said.

“At the same time, we are focused on returning to (adjusted earnings) profitability. We have complete confidence in the structural economics of our business based on the investments we have made and the key drivers that should propel profitability higher over time.”

Clint Engel

Clint Engel is a veteran home furnishings industry journalist and executive editor of Home News Now. Please share your feedback with him at clint@homenewsnow.com

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