Wayfair Sales fell during its first quarter, but the online furniture retailer narrowed its losses after cutting 13% of its workforce earlier in the year, the company announced Thursday.
Wayfair surpassed Wall Street expectations in terms of revenue and results and saw its active customers grow almost 3% compared to the same period a year ago.
Here's how Wayfair fared compared to what Wall Street anticipated, according to a survey of analysts by LSEG:
- Loss per share: Adjusted 32 cents vs. expected loss of 44 cents
- Revenue: $2.73 billion vs. $2.64 billion expected
Wayfair shares closed more than 16% higher on Thursday.
The company's reported net loss for the three months ended March 31 was $248 million, or $2.06 per share, compared with a loss of $355 million, or $3.22 per share, one 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 a year earlier. The steepest decline came from Wayfair's international segment, where sales declined nearly 6% to $338 million compared to the same period a year earlier.
Despite the sales decline, co-founder and CEO Niraj Shah struck a positive note in a press release, saying the quarter “ended with a rebound.”
“Shoppers are increasingly choosing Wayfair, and year-over-year growth in active customers is again positive and accelerating compared to the last quarter,” Shah said.
“For the first time since before the pandemic, we are seeing suppliers introducing large groups of new products into their catalogs as they look to build momentum for the next stage of growth,” he added.
Like some of its other digital-native peers, Wayfair implemented a series of layoffs after it saw sales boom during the pandemic and then slow as consumers began trading in new couches and shelves for dining and travel after The Covid-19 pandemic ended.
In January, it announced plans to cut 13% of its global workforce, or about 1,650 employees, so it could trim its structure and reduce costs after it went “overboard” with corporate hiring during the pandemic, the company previously said. The restructuring, the third Wayfair implemented since summer 2022, was expected to save the company about $280 million, it previously said.
Wayfair is still charting its path to profitability, but narrowed its losses by $107 million during the first quarter after implementing the latest round of job cuts. It also increased its number of active customers at a time when the home goods sector faces pressure as high interest rates and a slow housing market weigh on sales.
During the quarter, Wayfair's active customers grew 2.8% to 22.3 million, slightly above the 22.1 million analysts expected, according to StreetAccount.
On average, orders were valued at $285 during the quarter, compared with the $275.07 analysts were expecting, according to StreetAccount. While average orders were higher than Wall Street expectations, they fell slightly from the same period a year earlier, when the average order value was $287. This is 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.
