Holiday sales, international sales and investments in its logistics network are key to Wayfair’s Q4 and annual growth. The retailer, however, lost $244.61 million in 2017.

Wayfair Inc. posted another banner year—with e-commerce sales increasing more than 40% in 2017 over 2016, the web-only retailer reported today. In the fourth quarter, the home furnishings retailer sales jumped 48% year over year.

Holiday sales, international sales and the Wayfair’s investments in its logistics network were key to the retailer’s growth this quarter and year, CEO Niraj Shah told investors on an earnings call, according to a Seeking Alpha transcript.

For the quarter ended Dec. 31, e-commerce sales reached $1.42 billion up 48.1% from $959.0 million in the year ago period. The retailer’s U.S. e-commerce sales reached $1.23 billion in the fourth quarter, a 43.3% increase from $858.6 million in fourth quarter of 2016. International e-commerce sales collectively in Canada, the U.K. and Germany reached $191.7 million in the quarter, which is a 90.7% increase from $100.5 million. For the year, international e-commerce sales grew 114% year over year and reached $568.0 million.

Wayfair is particularly focused on growing its Canadian sales. For example, it opened its first CastleGate warehouse in Canada in 2017, which has reduced shipping costs and delivery times. Wayfair’s CastleGate fulfillment network is a large warehouse network in “strategic locations” that the retailer operates for its suppliers.


Those types of international investments are driving sales, they’re also impacting profitability, Shah said.

“These continued investments will increase our adjusted EBITDA losses internationally, but as I noted earlier, now is the right time to make this investment. The customers are clearly responding,” Shah said.

Profitability is continually an issue for the housewares retailer. Wayfair lost $244.6 million in 2017, a 25.8% increase from its $194.4 million loss in 2016. That’s because some long-term investments are not yet yielding revenue, Shah said. Even so, Wayfair is excited about its “future potential.”

In addition to its continued international investment, the retailer says its interior design services initiatives are not yet generating revenue. These investments will help shoppers convert in the future, Shah said. For example, Wayfair’s in-app augmented reality feature lets shoppers digitally view products in their room through their smartphones’ camera lens, which will give shoppers more confidence to buy a product. “We know one of the top reasons our customers decide not to complete a purchase is because they’re not confident in their design ability, and they’re simply not sure that the item will look great in their home,” Shah said.


Wayfair also continues to invest in its last-mile delivery facilities and middle-mile delivery process, which has helped decrease delivery times, lower damage costs and improve customer satisfaction, Shah said. For example, Wayfair reduced the average delivery time of a large parcel item in the U.S. by five days in 2017.

Wayfair also had a strong holiday shopping season. Wayfair’s sales increased 53% year over year during the Cyber 5 weekend of Thanksgiving Day through Cyber Monday.

“Notably, Black Friday, which is traditionally viewed as more of a brick-and-mortar shopping day for consumers, was our highest growth day during that Cyber 5 day period,” Shah said.

Home goods is the fastest‑growing product category online in 2016, according to an Internet Retailer analysis. The combined online sales of the 102 housewares and home furnishings retailers profiled in the Internet Retailer Home Goods Report soared 27.5% to $14.7 billion. That was by far the biggest growth rate of all 15 product categories Internet Retailer analyzes.


Within that, the accessories and home décor online sales increased 31.3% in 2016 over 2015, on average across the 34 online retailers in this category in Internet Retailer’s Top 1000, according to the  Internet Retailer’s Home Goods Report. Wayfair (No. 16 in the Internet Retailer 2017 Top 500) is the fastest-growing retailer in this group, growing online sales 59.8% in this time period—well above the category average. Year-over-year growth 2017 from 2016, however, slowed from a year ago and was about 42.3%, the retailer reported today.

Retail mass merchants Inc. (No. 1) and Walmart Inc. (No. 3) also want to get a piece of the fast-growing home furnishings action. Today, Walmart debuted a new home category on its site, which doubles its products assortments over the past year.

A study from One Click Retail shows Amazon and its marketplace sellers sold nearly $7 billion worth of home goods to U.S. consumers in 2016, a 33% jump from 2015, and accounted for about 28% of the online home goods and housewares market. When Amazon in November debuted two Amazon private-label brands of furniture and home goods—Stone & Beam and Rivet—it said home furnishings was one of its fastest-growing product categories.

For the fourth quarter ended Dec. 31, Wayfair also reports:

  • E-commerce revenue of $1.42 billion, up 48.1% from $959.0 million in Q4 2016.
  • Net revenue of $1.44 billion, a 46.3% increase from $984.6 million.
  • Net loss of $72.8 million compared with a loss of $44.0 million.
  • 47.3% of e-commerce orders were placed on a mobile device, compared with 43.3%.
  • Repeat customers placed 62.4% of orders compared with 58.0%.
  • Average order value was $229 compared with $203.

For the year, Wayfair reported:

  • E-commerce revenue of $4.64 billion up 42.3% from $3.26 billion.
  • Net revenue of $4.72 billion up 39.6% from $3.38 billion in the full year of 2016.
  • Net loss of $244.61 million compared with a loss of $194.38 million.