Wayfair Q2 beats Street with surprise profit

Wayfair reported results that beat analysts’ estimates amid a jump in gross margins, positive year-over-year order growth and ongoing cost-saving initiatives.

“I'm pleased to share today that we've passed one of our key milestones and we are reporting positive adjusted EBITDA and positive free cash flow," said Niraj Shah, CEO, co-founder and co-chairman, Wayfair.

The online home furnishings giant narrowed its net loss to $46 million, or $0.41 cents a share, for the quarter ended June 30, from $378 million, or $3.59 a share, in the year-ago period. Adjusted earnings came to $0.21 per share, bearing analysts estimates of a loss of  $0.73 cents per share. 

Total revenue fell 3.4% to $3.17 billion, ahead of estimates of $3.10 billion. U.S. net revenue fell 0.4% to $2.8 billion.

Active customers were down 7.6% to 21.8 million and orders per customer decreased to 1.82 from 1.85.  Orders delivered rose 3.0% to 10.3 million. Average order value was $307 in the second quarter of 2023, compared to $330 in the second quarter of 2022

Revenue per active customer over the last 12 months rose 1.5% to $545. 

Gross margin, or gross profit as a percentage of revenue, improved to 31.1% from 27.3%. Adjusted EBITDA was $128 million for the quarter and $114 million for the six months ended June 30.  Non-GAAP free cash flow was $128 million for the second quarter.

“Last year, we laid out a plan to strengthen our business that included a path to sustainable and growing profitability with several key milestones,” said Niraj Shah, CEO, co-founder and co-chairman, Wayfair.  For the past few quarters, you've seen us execute against that plan - to lower our costs, focus on the basics and earn more customer and supplier loyalty. And you've seen the tangible impact of this plan as our performance has continued to improve.”

“We think we are now in a very exciting place - having scale while remaining ambitious and entrepreneurial - and we plan to take full advantage of this,” Shad added.