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Wayfair (W) Q4 Loss Wider than Expected, Revenues Decline Y/Y
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Wayfair (W - Free Report) reported a non-GAAP loss of $1.71 per share for fourth-quarter 2022, wider than the Zacks Consensus Estimate for a loss of $1.63 per share. The figure came wider than the loss of 92 cents per share reported in the year-ago quarter.
Total net revenues of $3.1 billion beat the consensus mark by 1.4%. However, the top line declined 4.6% year over year.
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 1.8% year over year to $2.7 billion. International net revenues also declined 19.7% from the prior-year quarter’s figure to $415 million.
Active customers were down 19% year over year to 22.1 million. In addition, LTM net revenues per active customer increased 10.4% year over year to $553. The average order value climbed 5.2% year over year to $283.
The total number of orders delivered in the reported quarter was 11 million, down 9.1% year over year. In addition, orders per customer for the quarter were 1.81 compared with 1.89 in the year-ago period.
Repeat customers placed 8.5 million orders (accounting for 77.4% of total orders) in the fourth quarter, down 7.6% year over year.
Additionally, 61.7% of total orders delivered were placed through a mobile device in the reported quarter compared with 59% in the year-ago period.
Wayfair’s fourth-quarter gross margin was 28.8%, expanding 170 basis points on a year-over-year basis.
Adjusted EBITDA was ($71) million versus ($4) million in the year-ago quarter.
Customer service and merchant fees increased 7.2% year over year to $163 million.
Advertising expenses rose 17.7% from the prior-year quarter’s level to $406 million. Selling, operations, technology, and general and administrative expenses increased 12.9% year over year to $655 million.
Wayfair incurred an operating loss of $330 million for the reported quarter compared with an operating loss of $196 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Dec 31, 2022, cash, cash equivalents and short-term investments were $1.28 billion, down from $1.29 billion reported on Sep 30, 2022.
Long-term debt, as of Dec 31, 2022, was $3.14 billion compared with $3.13 billion on Sep 30, 2022.
In the fourth quarter, cash generated from operations was $98 million against $431 million of cash used in operations in the prior quarter.
Wayfair generated a negative free cash flow of $19 million.
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Wayfair (W) Q4 Loss Wider than Expected, Revenues Decline Y/Y
Wayfair (W - Free Report) reported a non-GAAP loss of $1.71 per share for fourth-quarter 2022, wider than the Zacks Consensus Estimate for a loss of $1.63 per share. The figure came wider than the loss of 92 cents per share reported in the year-ago quarter.
Total net revenues of $3.1 billion beat the consensus mark by 1.4%. However, the top line declined 4.6% year over year.
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 1.8% year over year to $2.7 billion. International net revenues also declined 19.7% from the prior-year quarter’s figure to $415 million.
Active customers were down 19% year over year to 22.1 million. In addition, LTM net revenues per active customer increased 10.4% year over year to $553. The average order value climbed 5.2% year over year to $283.
The total number of orders delivered in the reported quarter was 11 million, down 9.1% year over year. In addition, orders per customer for the quarter were 1.81 compared with 1.89 in the year-ago period.
Repeat customers placed 8.5 million orders (accounting for 77.4% of total orders) in the fourth quarter, down 7.6% year over year.
Additionally, 61.7% of total orders delivered were placed through a mobile device in the reported quarter compared with 59% in the year-ago period.
Wayfair Inc. Price, Consensus and EPS Surprise
Wayfair Inc. price-consensus-eps-surprise-chart | Wayfair Inc. Quote
Operating Results
Wayfair’s fourth-quarter gross margin was 28.8%, expanding 170 basis points on a year-over-year basis.
Adjusted EBITDA was ($71) million versus ($4) million in the year-ago quarter.
Customer service and merchant fees increased 7.2% year over year to $163 million.
Advertising expenses rose 17.7% from the prior-year quarter’s level to $406 million. Selling, operations, technology, and general and administrative expenses increased 12.9% year over year to $655 million.
Wayfair incurred an operating loss of $330 million for the reported quarter compared with an operating loss of $196 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Dec 31, 2022, cash, cash equivalents and short-term investments were $1.28 billion, down from $1.29 billion reported on Sep 30, 2022.
Long-term debt, as of Dec 31, 2022, was $3.14 billion compared with $3.13 billion on Sep 30, 2022.
In the fourth quarter, cash generated from operations was $98 million against $431 million of cash used in operations in the prior quarter.
Wayfair generated a negative free cash flow of $19 million.
Zacks Rank & Other Stocks to Consider
Currently, W has a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the retail-wholesale sector are Ulta Beauty (ULTA - Free Report) , Costco Wholesale (COST - Free Report) and Ross Stores (ROST - Free Report) , each currently carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ulta Beauty has gained 42.4% on a year-to-date basis. The long-term earnings growth rate for ULTA is currently projected at 13.75%.
Costco Wholesale has lost 1.6% on a year-to-date basis. The long-term earnings growth rate for COST is currently projected at 9.57%.
Ross Stores has gained 24.3% on a year-to-date basis. The long-term earnings growth rate for ROST is currently projected at 10.5%.