Wayfair Inc (W, Financial), a leading e-commerce platform specializing in home goods, reported its third-quarter financial results for 2024. The company, which operates primarily in the United States and several international markets, has been expanding its presence in the brick-and-mortar sector. Despite facing challenges, Wayfair continues to offer a vast array of products from over 20,000 suppliers under various brand names.
Performance Overview
Wayfair Inc (W, Financial) reported a total net revenue of $2.9 billion for Q3 2024, a 2.0% decrease from the previous year, missing the analyst estimate of $2,875.91 million. The U.S. net revenue also saw a decline of 2.3% year-over-year, amounting to $2.5 billion. International net revenue remained constant at $372 million. Despite the revenue shortfall, the company reported a diluted loss per share of $0.60, slightly worse than the analyst estimate of -$0.59.
Financial Achievements and Challenges
Wayfair's gross profit for the quarter was $873 million, representing 30.3% of total net revenue. The company achieved a Non-GAAP Adjusted EBITDA of $119 million, indicating a mid-single-digit Adjusted EBITDA margin for the second consecutive quarter. This performance underscores Wayfair's ability to maintain profitability amidst a challenging retail environment.
“Q3 marked another proofpoint of resilience for Wayfair with further market share capture in the face of sustained challenges in the category,” said Niraj Shah, CEO, co-founder, and co-chairman of Wayfair.
Key Financial Metrics
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Revenue | $2,884 million | $2,944 million |
| Gross Profit | $873 million | $917 million |
| Net Loss | $(74) million | $(163) million |
| Loss Per Share | $(0.60) | $(1.40) |
| Adjusted EBITDA | $119 million | $100 million |
Operational Highlights
Wayfair reported 21.7 million active customers as of September 30, 2024, a 2.7% decrease year-over-year. The LTM net revenue per active customer increased by 1.3% to $545. Orders delivered in the quarter totaled 9.3 million, a 6.1% decline from the previous year. However, the average order value rose to $310 from $297 in Q3 2023.
Analysis and Outlook
Wayfair's Q3 results highlight the company's ongoing efforts to balance profitability with market share expansion. The decrease in active customers and orders delivered suggests challenges in customer retention and acquisition. However, the increase in average order value and improved EBITDA margin reflect strategic cost management and a focus on enhancing customer loyalty.
Wayfair's financial position remains robust, with $1.3 billion in cash, cash equivalents, and short-term investments, and total liquidity of $1.9 billion. The company's ability to generate positive cash flow from operations, despite a net loss, is a positive indicator for future financial stability.
As Wayfair navigates the evolving retail landscape, its focus on profitability and customer engagement will be crucial in driving long-term growth and shareholder value.
Explore the complete 8-K earnings release (here) from Wayfair Inc for further details.
