Online home decor giant gains momentum in Q2

Despite posting a loss for the second quarter, Wayfair’s brand continues to gain traction and square off against competitors.



For the second quarter ended June 30, the home decor and furnishings e-retailer narrowed its net loss to $38.9 million from $48.3 million in the same period a year ago. It also posted a smaller-than-expected second quarter loss of 26 cents per share, beating analyst expectations of 46 cents per share, according to FactSet.



On a positive note, revenue rose to $1.12 billion from $786.9 million, a jump of 42.7% year-over-year (YoY). This also beat the consensus of $1.06 billion, according to FactSet.



Direct Retail net revenue, consisting of sales generated primarily through Wayfair’s sites, increased $346.8 million to $1.1 billion, up 45.9% YoY. Gross profit was $269.5 million or 24.0% of total net revenue.



The number of active customers in Wayfair’s Direct Retail business increased 43.1% YoY to hit 9.5 million. Repeat customers placed 61.3% of total orders in the second quarter of 2017, compared to 57.6% in the second quarter of 2016.



"We are pleased to report yet another exceptional quarter with strong momentum in revenue growth and profitability," said Niraj Shah, CEO, co-founder and co-chairman, Wayfair. "As consumers increasingly embrace the selection and convenience of shopping online instead of in physical brick and mortar stores, we are taking advantage of that shift and capturing market share by offering a truly differentiated, customer-centric shopping experience.”



Besides competing against brick-and-mortar competitors, this strategy also positions the company to take on Amazon, which is increasingly creating a foothold for itself in the furniture category. Besides expanding its merchandise assortment and custom designs, and building at least four massive warehouses focused on fulfilling and delivering bulky items, the online giant also offers custom-furniture design services.



However, Shah is relying on Wayfair’s unique customer service tools and merchandise to keep it one step ahead of Amazon. For example, its Search with Photo feature allows customers to quickly find merchandise within seconds, and its augmented reality technology enables shoppers to virtually stage items in their home — at scale — before they make a purchase.



“Our Castlegate and Wayfair Delivery Network initiatives enable us to delight customers with faster delivery speeds and a seamless shopping experience, and we are continuously expanding our product offering across multiple categories including plumbing, flooring, door and cabinet hardware, mattresses, seasonal décor and housewares,” Shah said.



“All of these developments are resonating strongly with customers, and we are excited to see strong traction for the Wayfair brand and shopping experience across the United States and our international markets in Canada, the United Kingdom and Germany,” he added. “We look forward to entering the second half of the year with tremendous momentum."