Wayfair (W - Free Report) reported a non-GAAP loss of $2.11 per share for third-quarter 2022, matching the Zacks Consensus Estimate. The figure worsened from the loss of $1.94 in the previous quarter. Also, it compares unfavorably with the earnings of 14 cents reported in the year-ago quarter.
Total net revenues of $2.8 billion beat the consensus mark by 0.4%. However, the top line declined 9% year over year and 13.5%, sequentially.
The top-line decrease was due to declining domestic and international revenues. Further, a fall in active customers affected the results.
Top-Line Details
Net revenues in the United States decreased 6% year over year to $2.4 billion. International net revenues also declined 24% from the prior-year quarter’s figure to $0.4 billion. On a constant-currency basis, international net revenue growth was a negative 22.6%.
Active customers were down 22.6% year over year to 22.6 million. In addition, LTM net revenues per active customer increased 13% year over year to $547. Average order value climbed 14.8% year over year to $325.
Total number of orders delivered in the reported quarter were 8.7 million, down 20.9% year over year. In addition, orders per customer for the quarter were 1.82 compared with 1.92 million in the year-ago period.
Repeat customers placed 6.8 million orders (accounting for 77.8% of total orders) in the third quarter, down 19% year over year.
Additionally, 58.6% of total orders delivered were placed through a mobile device in the reported quarter compared with 57.7% in the year-ago period.
Operating Results
Wayfair’s third-quarter gross margin was 29%, expanding 70 basis points on a year-over-year basis.
Adjusted EBITDA was a negative $124 million versus $101 million in the year-ago quarter.
Customer service and merchant fees increased 11.4% year over year to $156 million. Advertising expenses rose 12.1% from the prior-year quarter’s level to $353 million. Selling, operations, technology, and general and administrative expenses increased 31.7% year over year to $656 million.
Wayfair incurred an operating loss of $372 million for the reported quarter compared with an operating loss of $70 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Sep 30, 2022, cash, cash equivalents and short-term investments were $1.29 billion, down from $1.74 billion reported on Jun 30, 2022.
Long-term debt as of Sep 30, 2022, was $3.13 billion compared with $3.05 billion on Jun 30, 2022.
In the third quarter, net cash used in operations was $431 million compared with $115 million in the prior quarter.
Wayfair generated a free cash flow of negative $538 million.
Zacks Rank & Stocks to Consider
Wayfair currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the retail-wholesale sector are Ross Stores (ROST - Free Report) , Arhaus (ARHS - Free Report) and The Kroger (KR - Free Report) , each carryinga Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ross Stores has lost 17.8% on a year-to-date basis. The long-term earnings growth rate for the ROST stock is currently projected at 10.5%.
Arhaus has lost 34.3% on a year-to-date basis. The long-term earnings growth rate for the ARHS stock is currently projected at 14.3%.
Kroger has gained 2.6% on a year-to-date basis. The long-term earnings growth rate for the KR stock is currently projected at 11.7%.
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Wayfair (W - Free Report) reported a non-GAAP loss of $2.11 per share for third-quarter 2022, matching the Zacks Consensus Estimate. The figure worsened from the loss of $1.94 in the previous quarter. Also, it compares unfavorably with the earnings of 14 cents reported in the year-ago quarter.
Total net revenues of $2.8 billion beat the consensus mark by 0.4%. However, the top line declined 9% year over year and 13.5%, sequentially.
The top-line decrease was due to declining domestic and international revenues. Further, a fall in active customers affected the results.
Top-Line Details
Net revenues in the United States decreased 6% year over year to $2.4 billion. International net revenues also declined 24% from the prior-year quarter’s figure to $0.4 billion. On a constant-currency basis, international net revenue growth was a negative 22.6%.
Active customers were down 22.6% year over year to 22.6 million. In addition, LTM net revenues per active customer increased 13% year over year to $547. Average order value climbed 14.8% year over year to $325.
Total number of orders delivered in the reported quarter were 8.7 million, down 20.9% year over year. In addition, orders per customer for the quarter were 1.82 compared with 1.92 million in the year-ago period.
Repeat customers placed 6.8 million orders (accounting for 77.8% of total orders) in the third quarter, down 19% year over year.
Additionally, 58.6% of total orders delivered were placed through a mobile device in the reported quarter compared with 57.7% in the year-ago period.
Operating Results
Wayfair’s third-quarter gross margin was 29%, expanding 70 basis points on a year-over-year basis.
Adjusted EBITDA was a negative $124 million versus $101 million in the year-ago quarter.
Customer service and merchant fees increased 11.4% year over year to $156 million. Advertising expenses rose 12.1% from the prior-year quarter’s level to $353 million. Selling, operations, technology, and general and administrative expenses increased 31.7% year over year to $656 million.
Wayfair incurred an operating loss of $372 million for the reported quarter compared with an operating loss of $70 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Sep 30, 2022, cash, cash equivalents and short-term investments were $1.29 billion, down from $1.74 billion reported on Jun 30, 2022.
Long-term debt as of Sep 30, 2022, was $3.13 billion compared with $3.05 billion on Jun 30, 2022.
In the third quarter, net cash used in operations was $431 million compared with $115 million in the prior quarter.
Wayfair generated a free cash flow of negative $538 million.
Zacks Rank & Stocks to Consider
Wayfair currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the retail-wholesale sector are Ross Stores (ROST - Free Report) , Arhaus (ARHS - Free Report) and The Kroger (KR - Free Report) , each carryinga Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ross Stores has lost 17.8% on a year-to-date basis. The long-term earnings growth rate for the ROST stock is currently projected at 10.5%.
Arhaus has lost 34.3% on a year-to-date basis. The long-term earnings growth rate for the ARHS stock is currently projected at 14.3%.
Kroger has gained 2.6% on a year-to-date basis. The long-term earnings growth rate for the KR stock is currently projected at 11.7%.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How To Profit From Trillions On Spending For Infrastructure >>
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