Wayfair ( W Quick Quote W - Free Report) reported third-quarter 2021 non-GAAP earnings of 14 cents per share, which declined 93.9% year over year and 92.6% sequentially. The reported figure, however, surpassed the Zacks Consensus Estimate of 4 cents per share.
Total revenues were $3.1 billion, which declined 18.7% year over year and 19.1% sequentially. The top line also missed the consensus mark by 3.4%.
The top-line decrease was a result of declining domestic and international revenues. Further, a decline in orders per customer affected the results.
Net revenues in the United States decreased 20.8% year over year to $2.6 billion. International net revenues also decreased 6.8% from the prior-year quarter to $0.5 billion. Nonetheless, international net revenues reported 12.1% growth on a constant-currency basis.
Active customers were up 1.5% year over year to 29.2 million. In addition, LTM net revenues per active customer increased 7.3% year over year to $484. Average order value climbed 16.5% year over year to $283.
Total number of orders delivered in the reported quarter was 11 million, down 30.1% year over year. In addition, orders per customer for the quarter were 1.92 million compared with 1.94 million in the year-ago period.
Further, repeat customers placed 8.4 million orders (accounting for 76.3% of total orders) in the third quarter, down 25.8% year over year.
Additionally, 57.7% of total orders delivered were placed through a mobile device in the reported quarter compared with 60% in the year-ago period.
Wayfair’s third-quarter gross margin was 28.3%, contracting 160 basis points on a year-over-year basis.
Adjusted EBITDA was $101.1 million compared with $371.1 million in the year-ago quarter.
Customer service and merchant fees increased 0.2% year over year to $139.9 million. Advertising expenses declined 8.4% from the prior-year quarter to $315 million. Selling, operations, technology, general and administrative expenses increased 12.6% year over year to $497.6 million.
The company incurred an operating loss of $69.8 million for the reported quarter. It reported an operating income of $221.9 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Sep 30, 2021, cash, cash equivalents and short-term investments were $2.39 billion, reflecting a decline from $2.60 billion reported on Jun 30, 2021.
Long-term debt as of Sep 30, 2021 was $3.049 billion compared with $3.048 billion on Jun 30, 2021.
Net cash for operations was $130.8 million while free cash flow was a negative $203.2 million.
Zacks Rank & Stocks to Consider
Wayfair currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the retail-wholesale sector include
AutoNation ( AN Quick Quote AN - Free Report) , Conn’s ( CONN Quick Quote CONN - Free Report) and Macy’s ( M Quick Quote M - Free Report) . While AutoNation and Macy’s sport a Zacks Rank #1 (Strong Buy), Conn’s carries a Zacks Rank #2 (Buy). You can see . the complete list of today’s Zacks #1 Rank stocks here
Long-term earnings growth rates for Macy’s, AutoNation, and Conns are currently projected at 12%, 19.1%, and 23%, respectively.