Niraj Shah, CEO, Wayfair
Ashlee Espinal | CNBC
Online furniture retailer Wayfair‘s net loss widened in the first quarter as its sales surged nearly 20%, with more people flocking to its website to furnish their home offices and bedrooms during the coronavirus pandemic.
Its shares shot up more than 23% in premarket trading following the announcement.
Here’s how the company did in the first quarter ended March 31:
- Earnings per share: A loss of $2.30, adjusted
- Revenue: $2.33 billion
“The broader market disruption has highlighted the many differentiated advantages we have built as the e-commerce leader in Home over the last two decades,” Chief Executive Niraj Shah said in a statement.
“We are making significant strides toward profitability by driving gross margin expansion, increasing marketing efficiencies, and gaining leverage on operating expenses,” he added.
Wayfair reported a net loss of $285.87 million, or $3.04 a share, compared with a net loss of $200.39 million, or $2.20 per share, a year ago.
Excluding one-time items, Wayfair lost $2.30 per share.
Net revenue grew nearly 20% to $2.33 billion from $1.94 billion a year ago.
Analysts expected the company to report an adjusted loss of $2.60 per share on revenue of $2.31 billion, according to a poll by Refinitiv.
The company said it delivered 9.9 million orders during the quarter, up 21% year-over-year. It said repeat customers placed 6.9 million orders, representing an increase of almost 28%. Average order value dropped $2 from a year ago, to $235 per order.
The issue for Wayfair has long been, and continues to be, how to make money. The company has been criticized, among other things, for spending too much on advertising to acquire new customers on the internet. Wayfair has yet to report a profit, and its quarterly losses continue to widen. Wayfair went public in October 2014.
During the Covid-19 crisis, among a number of precautionary measures, Wayfair has introduced no-contact delivery, where signatures are no longer required for boxes, and drivers are being instructed to wash or sanitize their hands between deliveries. It also has started taking daily temperature checks at its distribution facilities.
The company said it ended the first quarter with cash, cash equivalents, and short- and long-term investments on hand of $891 million.
As of Monday’s market close, Wayfair shares are up more than 48% this year. It has a market cap of about $12.7 billion.
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