Wayfair sales come up short, but the retailer says demand for home goods online is strong2 min read

[ad_1]

Niraj Shah, CEO, Wayfair

Ashlee Espinal | CNBC

Wayfair on Thursday reported quarterly sales that fell short of analysts’ expectations. Though the online furniture retailer gained more customers during the period, they bought smaller, less-expensive items, dragging down average order values.

Shares initially tumbled more than 7% in premarket trading, as investors feared the pandemic boost that the company has seen, with more people investing in their homes, could be fading.

But management quelled those fears during a conference call, citing continued optimism in the home category and new pockets of growth. Shares recouped losses and rose 8% in early trading.

Here’s how Wayfair did during its fourth quarter ended Dec. 31, compared with what analysts were expecting, using a poll by Refinitiv:

  • Earnings per share: $1.24 adjusted vs. 86 cents expected
  • Revenue: $3.67 billion vs. $3.76 billion expected

“Like virtually all categories, shopping for the home is quickly and structurally moving online,” Chief Executive Niraj Shah said during a conference call with analysts. “We are, and should, continue to take outsized share. … The market is vast and underserved.”

Wayfair reported net income of $23.8 million, or 23 cents a share, compared with a loss of $330.2 million, or $3.54 per share, a year earlier. Excluding one-time adjustments, the company earned $1.24, better than the 86 cents forecast by analysts.

Sales grew nearly 45% to $3.67 billion from $2.53 billion a year earlier, short of the $3.76 billion that analysts were anticipating.

The company said its count of active customers — people who have made a purchase in the last year — rose 53.7% to 31.2 million.

But average order value fell slightly, to $223 from $226 a year earlier.

The company has yet to offer a financial outlook for 2021. But it said its growth will likely slow as it begins to lap the start of the pandemic. In 2020, sales soared as customers flocked to its website to buy items for their home offices, bedrooms and backyards.

Looking to the future, Wayfair said pockets of growth will include expanding its professional business in North America, becoming a bigger player in appliances by adding more brands to its site, and accumulating more credit card members.

Wayfair shares have rallied more than 240% over the past 12 months, as of market close Wednesday. The company has a market cap of $25.7 billion.

Find the full press release from Wayfair here.

[ad_2]
learn more

  • Post author:
  • Post category:Business News
  • Reading time:2 mins read