Wayfair swings to loss as sales fall 14%; CFO to leave
Wayfair reported a larger-than-expected first-quarter loss as consumer spending on home goods edged downward.
On the company’s earnings call, CEO and co-founder Niraj Shah told analysts that consumer spending is still climbing for retail overall, but that shoppers are devoting a larger share of their wallets to non-discretionary categories and “reprioritizing experiences like travel.”
The online home furnishings company reported a loss of $319 million, or $3.04 per share, for the quarter ended March 31, compared with net income of $18 million, or earnings per share of $0.16, in the year-ago period. Excluding one-time items, the company lost $1.96 per share. Analysts had expected a loss of $1.56 a share.
Sales fell 13.9% to $2.99 billion from $3.48 billion. Net revenue in the United States decreased 9.9%, to $2.5 billion. International net revenue plunged 31.4% to $451 million.
Wayfair also announced the upcoming retirement of CFO Michael Fleisher. Kate Gulliver, current chief people officer, will move into the role in November, with Fleisher remaining at the company for a transition period until early next year.
The retailer recently hosted the 2022 edition of its annual sales bonanza, “Way Day.” The two-day event was held on April 27 – April 28.
“While multiple macro cross-currents are filtering through the global economy, consumer health remains relatively strong,” stated Shah. “Shoppers are still very interested in the home category -- as evidenced by our most successful Way Day event ever last week, which included two of the four largest days in Wayfair’s entire history.”
Wayfair’s count of active customers in the first quarter fell 23.4% to 25.4 million. The average order value was $287, compared to $237 in the year-ago period. Orders delivered in the first quarter totaled 10.4 million, down 29.0% year-over-year
Repeat customers placed 8.1 million orders in the first quarter, a decrease of 26.0% from last year.
“The companies that will be most successful in navigating this dynamic environment are those that can act with agility, balancing near-term demands with outsized longer-term opportunities — which is an apt description for Wayfair,” stated Shaw. “We are well positioned to outperform and gain share from here, particularly as supply chain constraints ease, and we are not losing sight of the massive market opportunity still ahead.”
At the same time, he added, Wayfair is focused on returning to adjusted EBITDA profitability.
“We have complete confidence in the structural economics of our business based on the investments we have made and the key drivers that should propel profitability higher over time,” he said.