Wayfair sales fell in the first quarter, but the online furniture retailer constrained its losses after laying off 13% of its workforce earlier in the year, the company announced Thursday.
Wayfair exceeded Wall Street expectations on earnings and profits and saw its dynamic customer base grow nearly 3% from the year-ago period.
Here’s how Wayfair compared to Wall Street’s predictions, based on a survey of analysts conducted by LSEG:
- Loss per share: Adjusted 32 cents against an expected loss of 44 cents
- Income: $2.73 billion against the expected $2.64 billion
Wayfair shares closed up more than 16% on Thursday.
The company’s 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, a 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 was in Wayfair’s international segment, where sales fell nearly 6% to $338 million from the year-ago period.
Despite the sales decline, co-founder and CEO Niraj Shah sounded positive in a press release, stating that the quarter “ended with growth.”
“Shoppers are increasingly choosing Wayfair, and year-over-year dynamic customer growth is back to positive and accelerating compared to the last quarter,” Shah said.
“For the first time since before the pandemic, we see suppliers introducing huge groups of fresh products to their catalogs, wanting to gain momentum for the next stage of growth,” he added.
Like some of its digital peers, Wayfair carried out a series of layoffs after seeing sales spike during the pandemic and then decline as consumers began trading in fresh couches and shelves for dinners out 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, to downsize and cut costs after it “overshot” corporate hiring during the pandemic, the company previously said. The restructuring – Wayfair’s third since summer 2022 – was expected to save the company about $280 million, as previously reported.
Wayfair is still forging a path to profitability, but it reduced its losses by $107 million in the first quarter after implementing its latest round of job cuts. It has also increased its dynamic customer base at a time when the home goods sector is under pressure as high interest rates and a sluggish housing market weigh on sales.
Wayfair’s dynamic customer base grew 2.8% this quarter to 22.3 million, according to StreetAccount, slightly above the 22.1 million expected by analysts.
Orders were valued at an average of $285 in the quarter, according to StreetAccount, compared with the $275.07 that analysts expected. While average orders were higher than Wall Street expectations, they were down slightly from the year-ago period, 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 results announcement Here.
