Wayfair, an online furniture seller, saw a decrease in sales during its first quarter. However, it managed to reduce its losses after cutting 13% of its workforce at the beginning of the year. The company’s performance exceeded what Wall Street expected in terms of both revenue and losses, and it also experienced a nearly 3% growth in active customers compared to the same period last year.
Here’s a breakdown of how Wayfair performed compared to Wall Street’s predictions:
– Loss per share: Adjusted to 32 cents, better than the expected loss of 44 cents.
– Revenue: $2.73 billion, higher than the expected $2.64 billion.
As a result, Wayfair’s shares rose by more than 10% in morning trading on Thursday.
During the first quarter, the company reported a net loss of $248 million, or $2.06 per share, compared to a loss of $355 million, or $3.22 per share, in the same period last year. Excluding one-time items, the company’s loss was 32 cents per share.
Sales dropped to $2.73 billion, down slightly from $2.77 billion last year. The biggest decline was seen in Wayfair’s international segment, where sales fell by almost 6% to $338 million.
Despite the decrease in sales, Wayfair’s CEO Niraj Shah expressed optimism, noting that the quarter ended on a positive note. He highlighted the company’s growth in active customers and the increasing introduction of new products by suppliers.
Similar to other online companies, Wayfair had to lay off employees after experiencing a surge in sales during the pandemic, followed by a decline as consumers shifted their spending habits post-pandemic.
In January, the company announced plans to cut 13% of its global workforce, or about 1,650 employees, to streamline its operations and reduce costs. This restructuring was expected to save the company approximately $280 million.
Although Wayfair is still working towards profitability, it managed to reduce its losses by $107 million during the first quarter following the latest round of job cuts. The company also increased its active customer count, despite challenges in the home goods sector due to high interest rates and a slow housing market.
During the quarter, Wayfair’s active customer base grew by 2.8% to 22.3 million, slightly surpassing analysts’ expectations.
The average order value was $285, higher than the expected $275.07, but slightly lower than the average order value of $287 during the same period last year. This decrease was attributed to changes in Wayfair’s pricing strategy, which saw inflated unit prices in 2021 and 2022 start to decline last year.
