Wayfair Inc. (W - Free Report) reported first-quarter 2020 non-GAAP loss of $2.30 per share, narrower than the Zacks Consensus Estimate of a loss of $2.55.
Total revenues came in at $2.33 billion, up 19.8% year over year. However, the figure missed the Zacks Consensus Estimate by 0.4%.
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.
Following first-quarter results, its shares rose 23.7% due to narrower-than-expected loss.
Wayfair Inc. Price, Consensus and EPS Surprise
Quarter in Detail
Direct retail net revenues — including sales generated primarily through Wayfair’s sites — were $2.3 billion, which increased 20.3% year over year.
Active customers increased 28.6% from the prior-year quarter to 21.1 million. Also, LTM net revenues per active customer increased 1.6% year over year to $449 million.
Total number of orders delivered in the reported quarter was 9.9 million, up 21% year over year. In addition, orders per customer in the quarter were 1.86 million, reflecting an increase of 0.5% from the year-ago period. Further, repeat customers placed 6.9 million orders in the first quarter, up 27.9% year over year.
Operating Results
In the first quarter, Wayfair’s gross margin was 24.9%, up 70 basis points on a year-over-year basis.
Adjusted EBITDA margin was (5.5%) compared with (5.3%) in the year-ago quarter. This was due to increasing investments, mainly in international regions served.
The company’s operating expenses of $841.2 million increased 26.7% year over year. Operating loss was $262.1 million, wider than the prior-year loss of $193.6 million.
Balance Sheet & Cash Flow
At the end of the first quarter, cash, cash equivalents and short-term investments were $891 million, down from $987 million in the prior quarter. Accounts receivables were $110.3 million, up from $99.7 million in the fourth quarter.
Cash from operations was ($256.3) million and capital expenditure totaled $60 million. Free cash flow was ($354.6) million compared with ($158.5) million in the fourth quarter.
Zacks Rank and Other Stocks to Consider
Wayfair currently carries a Zacks Rank #1 (Strong Buy). Other top-ranked stocks in the broader technology sector include Akamai Technologies, Inc. (AKAM - Free Report) , Inuvo, Inc. (INUV - Free Report) and Shopify Inc. (SHOP - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth for Akamai, Inuvo, and Shopify is currently projected at 12.3%, 30% and 25.8%, respectively.
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Wayfair Inc. (W - Free Report) reported first-quarter 2020 non-GAAP loss of $2.30 per share, narrower than the Zacks Consensus Estimate of a loss of $2.55.
Total revenues came in at $2.33 billion, up 19.8% year over year. However, the figure missed the Zacks Consensus Estimate by 0.4%.
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.
Following first-quarter results, its shares rose 23.7% due to narrower-than-expected loss.
Wayfair Inc. Price, Consensus and EPS Surprise
Quarter in Detail
Direct retail net revenues — including sales generated primarily through Wayfair’s sites — were $2.3 billion, which increased 20.3% year over year.
Active customers increased 28.6% from the prior-year quarter to 21.1 million. Also, LTM net revenues per active customer increased 1.6% year over year to $449 million.
Total number of orders delivered in the reported quarter was 9.9 million, up 21% year over year. In addition, orders per customer in the quarter were 1.86 million, reflecting an increase of 0.5% from the year-ago period. Further, repeat customers placed 6.9 million orders in the first quarter, up 27.9% year over year.
Operating Results
In the first quarter, Wayfair’s gross margin was 24.9%, up 70 basis points on a year-over-year basis.
Adjusted EBITDA margin was (5.5%) compared with (5.3%) in the year-ago quarter. This was due to increasing investments, mainly in international regions served.
The company’s operating expenses of $841.2 million increased 26.7% year over year. Operating loss was $262.1 million, wider than the prior-year loss of $193.6 million.
Balance Sheet & Cash Flow
At the end of the first quarter, cash, cash equivalents and short-term investments were $891 million, down from $987 million in the prior quarter. Accounts receivables were $110.3 million, up from $99.7 million in the fourth quarter.
Cash from operations was ($256.3) million and capital expenditure totaled $60 million. Free cash flow was ($354.6) million compared with ($158.5) million in the fourth quarter.
Zacks Rank and Other Stocks to Consider
Wayfair currently carries a Zacks Rank #1 (Strong Buy). Other top-ranked stocks in the broader technology sector include Akamai Technologies, Inc. (AKAM - Free Report) , Inuvo, Inc. (INUV - Free Report) and Shopify Inc. (SHOP - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth for Akamai, Inuvo, and Shopify is currently projected at 12.3%, 30% and 25.8%, respectively.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>
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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