Wayfair’s The online furniture retailer announced Thursday that first-quarter sales fell, but it pared losses after cutting 13% of its workforce at the beginning of the year.
Wayfair’s revenue and profit exceeded Wall Street expectations, and active customers grew nearly 3% from the same period last year.
Here’s how Wayfair performed compared to Wall Street expectations, according to an LSEG survey of analysts:
- Loss per share: Adjusted 32 cents, expected loss of 44 cents
- income: US$2.73 billion, expected US$2.64 billion
Wayfair shares soared more than 17% in premarket trading Thursday.
The company reported a net loss of $248 million, or $2.06 per share, for the three months ended March 31, compared with a loss of $355 million, or $3.22 per share, in the same period a year earlier. Excluding one-time items, the company lost 32 cents per share.
Sales fell to $2.73 billion, down more than 1% from $2.77 billion in the same period last year. The biggest decline was in Wayfair’s international business, where sales fell nearly 6% from the same period last year to $338 million.
Despite the decline in sales, co-founder and CEO Niraj Shah struck a positive tone in a press release, saying the quarter “ended on an uptick.”
“Shoppers are increasingly choosing Wayfair, and year-over-year active customer growth is once again positive and accelerating compared to the previous quarter,” Shah said.
He added: “For the first time since pre-pandemic, we are seeing suppliers introducing a raft of new products into their catalogues, in a bid to create momentum for the next phase of growth.”
Like some of its other digitally native peers, Wayfair implemented a series of layoffs after seeing sales boom during the pandemic, but once the Covid-19 pandemic is over, when consumers start trading out dining out and traveling for new couches and shelves , Wayfair’s sales shrank.
The company previously said that in January this year, it announced plans to lay off 13% of its global workforce, or about 1,650 employees, so that it could streamline its structure and reduce costs after “over-hiring” companies during the epidemic. The company previously said the restructuring, the third implemented by Wayfair since the summer of 2022, is expected to save the company approximately $280 million.
Wayfair is still charting a path to profitability, but its first-quarter losses fell by $107 million after the latest round of layoffs. The company’s number of active customers also grew at a time when the home furnishings industry is under pressure as high interest rates and a sluggish housing market hurt sales.
Wayfair’s active customers grew 2.8% to 22.3 million in the quarter, slightly above analysts’ expectations of 22.1 million, according to StreetAccount.
StreetAccount data showed the average order value for the quarter was $285, compared with analysts’ expectations of $275.07. While average orders were higher than Wall Street forecasts, they were down slightly from the same period last year, when the average order value was $287. The company said this is because of changes in Wayfair’s unit prices, which increased in 2021 and 2022 and began to decline last year.
Read the full earnings report here.
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