Wayfair Inc. (W - Free Report) reported second-quarter 2020 non-GAAP earnings of $3.13 per share, which surpassed the Zacks Consensus Estimate of $1.02.
Total revenues came in at $4.30 billion, up 83.7% year over year. Also, the figure surpassed the Zacks Consensus Estimate by 5.8%.
The increase in revenues was driven by strong acceleration in new and repeat customer orders. Also, increase in active customers and strength in the company's direct retail business aided year-over-year revenue growth.
Quarter in Detail
Direct retail net revenues — including sales generated primarily through Wayfair’s sites — were $4.3 billion, which increased 84.2% year over year.
Active customers increased 46% from the prior-year quarter to 26 million. However, LTM net revenues per active customer decreased 1.6% year over year to $440 million.
Total number of orders delivered in the reported quarter was 18.9 million, up 106.2% year over year. In addition, orders per customer for the quarter were 1.89 million, reflecting an increase of 1.6% from the year-ago period. Further, repeat customers placed 12.7 million orders in the second quarter, up 104.9% year over year.
Operating Results
For the second quarter, Wayfair’s gross margin was 30.7%, up 680 basis points on a year-over-year basis.
Adjusted EBITDA margin was 10.2% compared with (3%) in the year-ago quarter.
The company’s operating expenses of $1.02 billion increased 39.7% year over year. Operating income was $274.2 million, wider than the prior-year loss of $181.1 million.
Balance Sheet & Cash Flow
At second quarter-end, cash, cash equivalents and short-term investments were $2.4 billion, up from $891 million in the prior quarter. Accounts receivables were $119 million, up from $110.3 million in the first quarter.
Cash from operations was $1.14 billion and capital expenditure totaled $44.8 million. Free cash flow was $1.05 billion compared with ($354.6) million in the first quarter.
Zacks Rank and Stocks to Consider
Wayfair currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Dropbox (DBX - Free Report) , Asure Software, Inc. (ASUR - Free Report) and Analog Devices (ADI - Free Report) . While both Dropbox and Asure Software sport a Zacks Rank #1 (Strong Buy), Analog Devices carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Dropbox, Asure Software, and Analog Devices are scheduled to report quarterly earnings on Aug 6, Aug 10 and Aug 19, respectively.
Long-term earnings growth rate for Dropbox, Asure Software, and Analog Devices is pegged at 16.83%, 14% and 13.33%, respectively.
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
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Wayfair Inc. (W - Free Report) reported second-quarter 2020 non-GAAP earnings of $3.13 per share, which surpassed the Zacks Consensus Estimate of $1.02.
Total revenues came in at $4.30 billion, up 83.7% year over year. Also, the figure surpassed the Zacks Consensus Estimate by 5.8%.
The increase in revenues was driven by strong acceleration in new and repeat customer orders. Also, increase in active customers and strength in the company's direct retail business aided year-over-year revenue growth.
Quarter in Detail
Direct retail net revenues — including sales generated primarily through Wayfair’s sites — were $4.3 billion, which increased 84.2% year over year.
Active customers increased 46% from the prior-year quarter to 26 million. However, LTM net revenues per active customer decreased 1.6% year over year to $440 million.
Total number of orders delivered in the reported quarter was 18.9 million, up 106.2% year over year. In addition, orders per customer for the quarter were 1.89 million, reflecting an increase of 1.6% from the year-ago period. Further, repeat customers placed 12.7 million orders in the second quarter, up 104.9% year over year.
Operating Results
For the second quarter, Wayfair’s gross margin was 30.7%, up 680 basis points on a year-over-year basis.
Adjusted EBITDA margin was 10.2% compared with (3%) in the year-ago quarter.
The company’s operating expenses of $1.02 billion increased 39.7% year over year. Operating income was $274.2 million, wider than the prior-year loss of $181.1 million.
Balance Sheet & Cash Flow
At second quarter-end, cash, cash equivalents and short-term investments were $2.4 billion, up from $891 million in the prior quarter. Accounts receivables were $119 million, up from $110.3 million in the first quarter.
Cash from operations was $1.14 billion and capital expenditure totaled $44.8 million. Free cash flow was $1.05 billion compared with ($354.6) million in the first quarter.
Zacks Rank and Stocks to Consider
Wayfair currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Dropbox (DBX - Free Report) , Asure Software, Inc. (ASUR - Free Report) and Analog Devices (ADI - Free Report) . While both Dropbox and Asure Software sport a Zacks Rank #1 (Strong Buy), Analog Devices carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Dropbox, Asure Software, and Analog Devices are scheduled to report quarterly earnings on Aug 6, Aug 10 and Aug 19, respectively.
Long-term earnings growth rate for Dropbox, Asure Software, and Analog Devices is pegged at 16.83%, 14% and 13.33%, respectively.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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