Wayfair’s Sales fell in the first quarter, but the furniture retailer narrowed its losses after cutting its workforce by 13% at the start of the year, the company said on Thursday.
Wayfair beat Wall Street expectations on the top and bottom lines and saw active customers grow nearly 3% compared to the year-ago period.
Here’s how Wayfair did compared to what Wall Street expected, based on a survey of analysts from LSEG:
- Loss per share: Adjusted 32 cents versus an expected loss of 44 cents
- Income: $2.73 billion vs. $2.64 billion expected
Shares of Wayfair closed more than 16% higher on Thursday.
The company’s reported net loss for the quarter ended March 31 was $248 million, or $2.06 per share, compared with 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 percent from $2.77 billion a year earlier. The biggest decline came from Wayfair’s international division, where sales fell nearly 6 percent to $338 million compared to the year-ago period.
Despite the drop in sales, co-founder and CEO Niraj Shah struck a positive note in a press release, saying the quarter “ended with a bang.”
“Shoppers are increasingly choosing Wayfair, with year-over-year active customer growth once again positive and accelerating compared to the previous quarter,” said Shah.
“For the first time since the pre-pandemic, we are seeing suppliers introducing large groups of new products into their catalogs as they try to push for the next stage of growth,” he added.
Like some of its other digitally native peers, Wayfair implemented a series of layoffs after seeing sales soar during the pandemic, then shrink as consumers began trading in new sofas and shelves for dining out and traveling after the end of the Covid-19 pandemic.
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 a corporate hiring “surge” during the pandemic. , the company previously said. The restructuring — the third Wayfair has implemented since the summer of 2022 — was expected to save the company about $280 million, it previously said.
Wayfair is still charting its path to profitability, but it narrowed its losses by $107 million in the first quarter after implementing its latest round of job cuts. It also increased its number of active customers at a time when the home goods industry is under pressure as high interest rates and a sluggish housing market weigh on sales.
During the quarter, Wayfair’s active customers rose 2.8% to 22.3 million, slightly higher than the 22.1 million analysts expected, according to StreetAccount.
On average, orders were valued at $285 during the quarter, compared with the $275.07 analysts had expected, according to StreetAccount. While average orders were higher than Wall Street expectations, they were down slightly from last year’s period, when the average order value was $287. That’s because of changes in Wayfair’s unit prices, which swelled in 2021 and 2022 and began to decline last year, the company said.
Read the full earnings release here.