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Wayfair (W) Q3 Loss Narrower Than Expected, Revenues Rise Y/Y
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Wayfair (W - Free Report) reported a third-quarter 2023 non-GAAP loss of 13 cents per share, which beat the Zacks Consensus Estimate by 69.77% and was much narrower than the year-ago quarter’s loss of $2.11.
Net revenues of $2.94 billion lagged the consensus mark by 1.42%. However, the top line increased 3.7% year over year.
A decline in the active customer base negatively impacted results. Active customers were down 4.3% year over year to 22.3 million but beat the consensus mark by 0.51%.
LTM net revenues per active customer decreased 1.6% year over year to $538, which lagged the Zacks Consensus Estimate by 1.74%.
Net revenues in the United States (87.8% of total net revenues) increased 5.4% year over year to $2.6 billion. The figure lagged the Zacks Consensus Estimate by 1.11%.
International net revenues (12.2% of total net revenues) declined 7% year over year and 7.8% on a constant currency basis to $372 million. It also missed the consensus mark by 2.39%.
Orders per customer for the quarter were 1.83, up from 1.82 reported in the year-ago quarter. The figure came ahead of the Zacks Consensus Estimate of 1.82.
The average order value declined 8.6% year over year to $297, which lagged the consensus mark by 1.97%.
The total number of orders delivered in the reported quarter was 9.9 million, which increased 13.8% year over year.
Repeat customers placed 7.9 million orders (accounting for 79.7% of total orders) in the second quarter, up 16.2% year over year.
Additionally, 61.7% of total orders delivered were placed through mobile devices in the reported quarter compared with 58.6% in the year-ago quarter.
Operating Results
Wayfair’s third-quarter gross margin was 31.1%, expanding 210 basis points on a year-over-year basis.
Adjusted EBITDA was $100 million against an EBITDA loss of $124 million in the year-ago quarter.
Customer service and merchant fees decreased 12.8% year over year to $136 million.
Advertising expenses fell 4.5% year over year to $337 million. Selling, operations, technology and general and administrative expenses decreased 9.1% year over year to $596 million.
Wayfair incurred a GAAP operating loss of $152 million in the reported quarter compared with an operating loss of $372 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Sep 30, 2023, cash, cash equivalents and short-term investments were $1.28 billion, up from $1.25 billion reported on Jun 30, 2023.
Long-term debt, as of Sep 30, 2023, was $3.207 billion compared with $3.205 billion on Jun 30.
In the third quarter, cash generated from operations amounted to $121 million compared with $217 million generated from operations in the second quarter.
Wayfair generated a free cash flow of $42 million in the reported quarter.
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Wayfair (W) Q3 Loss Narrower Than Expected, Revenues Rise Y/Y
Wayfair (W - Free Report) reported a third-quarter 2023 non-GAAP loss of 13 cents per share, which beat the Zacks Consensus Estimate by 69.77% and was much narrower than the year-ago quarter’s loss of $2.11.
Net revenues of $2.94 billion lagged the consensus mark by 1.42%. However, the top line increased 3.7% year over year.
A decline in the active customer base negatively impacted results. Active customers were down 4.3% year over year to 22.3 million but beat the consensus mark by 0.51%.
LTM net revenues per active customer decreased 1.6% year over year to $538, which lagged the Zacks Consensus Estimate by 1.74%.
Wayfair Inc. Price, Consensus and EPS Surprise
Wayfair Inc. price-consensus-eps-surprise-chart | Wayfair Inc. Quote
Quarter Details
Net revenues in the United States (87.8% of total net revenues) increased 5.4% year over year to $2.6 billion. The figure lagged the Zacks Consensus Estimate by 1.11%.
International net revenues (12.2% of total net revenues) declined 7% year over year and 7.8% on a constant currency basis to $372 million. It also missed the consensus mark by 2.39%.
Orders per customer for the quarter were 1.83, up from 1.82 reported in the year-ago quarter. The figure came ahead of the Zacks Consensus Estimate of 1.82.
The average order value declined 8.6% year over year to $297, which lagged the consensus mark by 1.97%.
The total number of orders delivered in the reported quarter was 9.9 million, which increased 13.8% year over year.
Repeat customers placed 7.9 million orders (accounting for 79.7% of total orders) in the second quarter, up 16.2% year over year.
Additionally, 61.7% of total orders delivered were placed through mobile devices in the reported quarter compared with 58.6% in the year-ago quarter.
Operating Results
Wayfair’s third-quarter gross margin was 31.1%, expanding 210 basis points on a year-over-year basis.
Adjusted EBITDA was $100 million against an EBITDA loss of $124 million in the year-ago quarter.
Customer service and merchant fees decreased 12.8% year over year to $136 million.
Advertising expenses fell 4.5% year over year to $337 million. Selling, operations, technology and general and administrative expenses decreased 9.1% year over year to $596 million.
Wayfair incurred a GAAP operating loss of $152 million in the reported quarter compared with an operating loss of $372 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Sep 30, 2023, cash, cash equivalents and short-term investments were $1.28 billion, up from $1.25 billion reported on Jun 30, 2023.
Long-term debt, as of Sep 30, 2023, was $3.207 billion compared with $3.205 billion on Jun 30.
In the third quarter, cash generated from operations amounted to $121 million compared with $217 million generated from operations in the second quarter.
Wayfair generated a free cash flow of $42 million in the reported quarter.
Zacks Rank & Stocks to Consider
Currently, Wayfair has a Zacks Rank #3 (Hold).
The Gap (GPS - Free Report) , Groupon (GRPN - Free Report) , and Walmart (WMT - Free Report) are some better-ranked stocks that investors can consider in the broader Retail-Wholesale sector. While The Gap sports a Zacks Rank #1 (Strong Buy), Groupon and Walmart carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of The Gap have gained 19.9% in the year-to-date period. The company is set to report third-quarter 2023 results on Nov 16.
Shares of Groupon have increased 59.9% year to date. The company is likely to report third-quarter 2023 results on Nov 9.
Shares of Walmart have gained 17% in the same time frame. The company is slated to report third-quarter fiscal 2024 results on Nov 16.