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Wayfair reported a strong year-over-year revenue increase Tuesday for the third quarter.
The e-commerce website's revenue and growth slowed sequentially from the second quarter, but the repeat customer metrics show possible long-term strength.
Wayfair ended the third quarter with 28.8 million active customers, up 51% year-over-year.
Orders per customer improved from 1.85 to 1.94 year-over-year.
Related Link: Tony Zhang’s Wayfair Options Trade
Why It’s Important: Wayfair said it notched 11.3 million orders from repeat customers in the third quarter. This figure grew 84.4% year-over-year.
Repeat customers made up 71.9% of third-quarter revenue, compared to 67.3% in the third quarter of the last fiscal year.
Those figures could be important going forward as Wayfair moves beyond a pandemic play and work-from-home stock.
In the second quarter, Wayfair reported higher revenue of $4.3 billion and higher revenue growth of 84% year-over-year.
The second quarter saw repeat customers make up 67.4% of total revenue.
“While today’s unique environment has accentuated these trends, we are confident there is a long runway for continued strong profitable growth ahead for Wayfair — well beyond when the current circumstances have passed," CEO Niraj Shah said in a statement.
W Price Action: Wayfair shares were trading 3.57% higher to $265 at last check Tuesday.
Benzinga’s Take: The pandemic and a shift to work from home has led new customers to e-commerce companies like Wayfair.
These companies are hoping to capture long-term gains by winning them as future customers.
The strength in Wayfair’s repeat customer business in the third quarter could be a positive sign for future earnings.
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