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02/28/2020

Wayfair’s losses mount to nearly $1 billion in 2019

Marianne Wilson
Editor-in-Chief
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Wayfair Inc. can’t seem to find a way to be profitable even as its sales continue to surge. 

The e-commerce home furnishings giant, which has never reported a profit, posted a net loss of $330.2 million, or $3.54 per share, in the quarter ended Dec. 31, compared to a loss of $143.8 million, or $1.59 per share, in the year-ago period. Adjusted losses were $2.80 per share, more than the loss of $2.63 that analysts had forecast. For the full year, Wayfair’s annual net loss almost doubled, to $985 million. 

Neil Saunders, managing director of GlobalData Retail, commented that Wayfair has no clear path to profitability. 

“That the company has a $1.5 billon long-term debt pile which costs it about $54 million a year in interest is bad enough,” he said. “But on top of this, its operating metrics are incredibly weak and do not even hint at the business being sustainable.” For more comments, click here

Wayfair’s total net revenue rose 25.8% to $2.53 billion from $2.01 billion and was in line with expectations. For the full year, Wayfair’s total net revenue increased 34.6% to $9.1 billion. 

Revenue per active customer rose 1.1% in the fourth quarter to $448. Average order value was $226, compared to $227 last year. Repeat customers placed 68.6% of orders in the fourth quarter.  

In February, Wayfair confirmed that it was cutting about 500 jobs 

In a statement, Wayfair CEO Niraj Shah struck an optimistic note and spoke of the “tremendous opportunity” ahead. 

“While already operating at a run rate in excess of $10 billion in annual net revenue, we have barely scratched the surface of our total addressable market and are only just beginning to reap the benefits of our large strategic investments across North America and Europe,” stated Niraj Shah, CEO, Wayfair. “To take advantage of the tremendous opportunity ahead, we are taking important steps to further optimize the business and drive greater efficiencies where needed to enhance our customer experience, strengthen our supplier partnerships, and further propel us down the path to profitability.”