Wayfair Stock Declines as Online Home Furnisher Loses Customers

Wayfair (W) shares slipped Friday even as adjusted profit soared above analysts’ estimates as the online home furnishing retailer lost customers.

The company reported third-quarter adjusted earnings per share (EPS) of $0.22, nearly double the forecast of analysts surveyed by Visible Alpha. Revenue fell 2% year-over-year to $2.88 billion, in line with expectations. Adjusted EBITDA margin was 4%.

Active customers declined 3% to 21.7 million, and orders delivered slumped 6% to 9.3 million. Repeat customers placed 7.4 million orders, down 6%.

On the plus side, last 12 months (LTM) revenue per customer was up 1% to $545, and the average order value increased $13 to $310. The company slashed its operating expenses by 11% to $947 million. 

CEO Notes ‘Sustained Challenges’

Co-founder and Chief Executive Officer (CEO) Niraj Shah explained that Wayfair grew its market share “in the face of sustained challenges in the category.” Shah added that the company “navigated a dynamic consumer environment while driving further discipline on costs to achieve a mid-single-digit Adjusted EBITDA margin for the second quarter in a row.” 

Shares of Wayfair, which initially soared in premarket trading after the report, were down 1% in recent trading and have lost a third of their value this year.