Wayfair Sales fell during the first quarter, but the online furniture retailer pared its losses after cutting its workforce by 13% at the start of the year, the company announced Thursday.
Wayfair beat Wall Street expectations in terms of top and bottom line results and saw active customer growth of nearly 3% compared to the same period last year.
Here's how Wayfair's performance compared to what Wall Street expected, based on a survey of analysts conducted by LSEG:
Loss per share: 32 cents adjusted vs. expected loss of 44 cents Revenue: $2.73 billion vs. $2.64 billion expected
Wayfair shares closed up more than 16% on Thursday.
The company's reported net loss for the three-month period ended March 31 was $248 million, or $2.06 per share, compared to a loss of $355 million, or $3.22 per share, a year earlier. Excluding one-time items, the company lost 32 cents per share.
Sales fell to $2.73 billion, down more than 1% from $2.77 billion the previous year. The biggest decline came in Wayfair's international segment, where sales fell nearly 6% to $338 million compared to the same period last year.
Despite the decline in sales, co-founder and CEO Neeraj Shah sounded a positive note in a press release, saying the quarter “ended on a high.”
“Shoppers are increasingly choosing Wayfair, with year-over-year active customer growth once again positive and accelerating compared to last quarter,” Shah said.
“For the first time since before the pandemic, we are seeing suppliers introducing significant ranges of new products into their catalogs as they look to build momentum for the next phase of growth,” he added.
Like some of its other digital peers, Wayfair implemented a series of layoffs after seeing sales boom during the pandemic and then shrink as consumers began trading in new sofas and shelves for dining out and traveling after the Covid-19 pandemic ended.
In January, it announced plans to cut 13% of its global workforce, or about 1,650 employees, so it can trim its structure and cut costs after it “over-hired” companies during the pandemic, the company previously said. It previously said the restructuring — Wayfair's third since the summer of 2022 — was expected to save the company about $280 million.
Wayfair is still charting its path to profitability, but it cut its losses by $107 million during the first quarter after implementing the latest round of job cuts. Its number of active customers has also increased at a time when the household goods sector is facing pressure as high interest rates and a sluggish housing market impact sales.
During the quarter, Wayfair's number of active customers rose 2.8% to 22.3 million, slightly more than the 22.1 million analysts expected, according to StreetAccount.
On average, orders were worth $285 during the quarter, compared to the $275.07 that analysts expected, according to StreetAccount. While average orders were higher than Wall Street forecasts, they were down slightly from the same period last year, when the average order value was $287. That's due to changes in Wayfair's unit prices, which ballooned in 2021 and 2022 and began to decline last year, the company said.
Read the full earnings release here.
