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Wayfair (W) Q1 Loss Narrower than Anticipated, Revenues Miss
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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.
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.
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 (W) Q1 Loss Narrower than Anticipated, Revenues Miss
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
Wayfair Inc. price-consensus-eps-surprise-chart | Wayfair Inc. Quote
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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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%.
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