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Wayfair (W) to Report Q2 Earnings: What's in the Cards?

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Wayfair (W - Free Report) is set to report second-quarter 2021 results on Aug 5.

The Zacks Consensus Estimate for second-quarter sales is currently pegged at $3.94 billion, indicating a year-over-year decline of 8.4%.

Further, the consensus mark for earnings is pegged at $1.19 per share, indicating a fall of 61.9% from the year-ago reported figure.

Wayfair beat the Zacks Consensus Estimate in all the trailing four quarters, delivering an earnings surprise of 167.98%, on average.

Wayfair Inc. Price and EPS Surprise

Wayfair Inc. Price and EPS Surprise

Wayfair Inc. price-eps-surprise | Wayfair Inc. Quote

Factors to Consider

Wayfair's expanding customer base is likely to get reflected in its second quarter performance. Active customers — which grew 57.3% year over year to $33.2 million in the first quarter — might have continued the momentum in second-quarter 2021, driven by ongoing consumer migration to e-commerce.

Additionally, it is likely to have gained from solid momentum across existing customers who repeat orders on the platform, thanks to improved shopping experience.

Further, the top line is expected to have benefited from an increase in online home-furnishing orders. The work-from-home trend owing to the coronavirus pandemic prompted customers to put more value to their personal spaces and thus spend on home furnishing.

Furthermore, the company’s high investments in the platform and improving customer as well as supplier experiences are likely to have been positives.

Additionally, growing investments in 3D imaging technology to create affordable and high-quality virtual imagery might have resulted in high traffic as well as strong sales in the second quarter.

Introduction of more features in media services like keyword bidding and options to display several stock keeping units in one promotional unit is likely to have driven the media business growth during the quarter under review.

Wayfair has been investing heavily for expanding reach to Canada and Europe. This is anticipated to get reflected in the upcoming quarterly results.

Rising initiatives to experiment new concepts like test into physical retail, introducing new customer-facing creative, refining the unique positioning of each of the brands and developing new supplier-facing services are likely to have benefited the company’s performance in the soon to-be-reported quarter.

Yet, supply chain challenges are likely to have remained concerns. Sluggishness in inventory and delivery times might get reflected in the upcoming quarterly results.

What Our Model Says

Our proven model predicts an earnings beat for Wayfair this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

It has an Earnings ESP of +6.01% and a Zacks Rank #3, at present.

Other Stocks to Consider

Here are some other stocks that you may also consider as our model shows that these too have the right combination of elements to beat on earnings this season.

Agilent Technologies (A - Free Report) has an Earnings ESP of +1.16% and a Zacks Rank of 2, at present.

Avnet (AVT - Free Report) has an Earnings ESP of +9.82% and a Zacks Rank of 1, at present.

CyberArk Software (CYBR - Free Report) has an Earnings ESP of +37.93% and a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

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