The Wayfair app on a smartphone arranged in Hastings-on-Hudson, New York.
Tiffany Hagler-Geard | Bloomberg | Getty Images
Wayfair's Sales fell during its first fiscal quarter, but the online furniture retailer was able to cut losses after cutting 13% of its workforce at the start of the year, the company announced Thursday.
Wayfair exceeded Wall Street expectations at both the top and bottom levels, growing its number of active customers by nearly 3% compared to the same period a year ago.
Here's how Wayfair did, compared to what Wall Street expected, based on a survey of analysts by LSEG:
- Loss per share: Adjusted 32 cents versus an expected loss of 44 cents
- Gain: $2.73 billion versus $2.64 billion expected
Wayfair shares rose as much as 9% in premarket trading 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, a year earlier. Excluding one-time items, the company lost 32 cents per share.
Revenue fell to $2.73 billion, more than 1% less than $2.77 billion a year earlier. The biggest decline came from Wayfair's international segment, where revenue fell nearly 6% to $338 million compared to the same period a year ago.
Despite the revenue decline, CEO and co-founder Niraj Shah struck a positive note in a press release, saying the quarter “ended on an upswing.”
“Shoppers are increasingly choosing Wayfair, with year-over-year active customer growth once again positive and accelerating compared to last quarter,” said Shah.
“For the first time since pre-pandemic, we are seeing suppliers introducing large groups of new products into their catalogs as they look to build momentum for the next phase of growth,” he added.
Like some of its other digitally native peers, Wayfair carried out a series of layoffs after sales boomed during the pandemic, then fell as consumers began trading in new couches and shelves for dining out and travel after the Covid 19 pandemic had ended.
In January, it announced plans to cut 13% of its global workforce, or about 1,650 employees, so it could downsize its structure and cut costs after going “overboard” in hiring during the pandemic, it said the company before. The restructuring – the third Wayfair to be implemented since summer 2022 – was expected to save the company about $280 million, it previously said.
The company is still charting its path to profitability, but managed to cut its first fiscal quarter losses by $107 million after the latest round of job cuts. The number of active customers also grew at a time when the home goods sector is under pressure as high interest rates and a sluggish housing market weigh on sales.
During the quarter, Wayfair's number of active customers grew 2.8% to 22.3 million, slightly more than the 22.1 million analysts expected, according to StreetAccount.
On average, orders during the quarter were valued at $285, compared to the $275.07 analysts expected, according to StreetAccount. While average orders exceeded Wall Street expectations, they were down 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 had inflated in 2021 and 2022 and started falling last year, the company said.
Read the full earnings release here.