Wayfair (W) Q2 Earnings Better Than Expected, Revenues Fall Y/Y
Wayfair W delivered non-GAAP earnings of 21 cents per share for second-quarter 2023, which compares favorably with the Zacks Consensus Estimate for a loss of 67 cents per share. The company reported a loss of $1.94 per share in the year-ago quarter.
Total net revenues of $3.17 billion beat the consensus mark of $3.12 billion. However, the top line declined 3.4% year over year due to decreasing domestic and international revenues.
A decline in active customers affected the results.
Quarter Details
Net revenues in the United States decreased 0.4% year over year to $2.79 billion (87.8% of total net revenues). The figure beat the Zacks Consensus Estimate of $2.68 billion.
International net revenues also declined 20.9% from the prior-year quarter’s figure to $386 million (12.2% of total net revenues). The figure exhibited a decline of 18.2% on a constant currency basis. It also missed the consensus mark of $405 million.
Active customers were down 7.6% year over year to 21.8 million, which missed the consensus mark of 21.9 million.
LTM’s net revenues per active customer increased 1.5% year over year to $545, which came ahead of the Zacks Consensus Estimate of $532. The average order value was down 7% year over year at $307, lower than the consensus mark of $309.
The total number of orders delivered in the reported quarter was 10.3 million, which increased 3% year over year. The figure came ahead of the Zacks Consensus Estimate of 10.04 million.
Orders per customer for the quarter were 1.82, down 1.6% from the year-ago period. The figure came ahead of the Zacks Consensus Estimate of 1.80.
Repeat customers placed 8.3 million orders (accounting for 80.1% of total orders) in the second quarter, up 6.4% year over year.
Additionally, 61.6% of total orders delivered were placed through mobile devices 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 second-quarter gross margin was 31.1%, expanding 380 basis points on a year-over-year basis.
Adjusted EBITDA was $128 million versus $108 million in the year-ago quarter.
Customer service and merchant fees decreased 11.1% year over year to $144 million.
Advertising expenses fell 6.7% from the prior-year quarter’s level to $352 million. Selling, operations, technology and general and administrative expenses decreased 8.4% year over year to $630 million.
Wayfair incurred an operating loss of $142 million in the reported quarter compared with an operating loss of $372 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Jun 30, 2023, cash, cash equivalents and short-term investments were $1.25 billion, up from $1.05 billion reported on Mar 31, 2023.
Long-term debt, as of Jun 30, 2023, was $3.205 billion compared with $3.138 billion on Mar 31, 2023.
In the second quarter, cash generated from operations amounted to $217 million against $147 million used in operations in the first quarter.
Wayfair generated a free cash flow of $128 million in the reported quarter.
Zacks Rank & Stocks to Consider
Currently, Wayfair has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the retail-wholesale sector are BJ’s Restaurants BJRI, Domino’s Pizza DPZ and Lithia Motors LAD. While BJ’s Restaurants and Domino’s Pizza sport a Zacks Rank #1 (Strong Buy), Lithia Motors carries a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
BJ’s Restaurants has gained 37.3% on a year-to-date basis. The long-term earnings growth rate for BJRI is currently projected at 15%.
Domino’s Pizza has gained 15.9% on a year-to-date basis. The long-term earnings growth rate for DPZ is currently projected at 12.97%.
Lithia Motors has gained 47.6% on a year-to-date basis. The long-term earnings growth rate for LAD is currently projected at 3%.
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Wayfair Inc. (W) : Free Stock Analysis Report
