Wayfair Inc.’s e-commerce sales surged 49.1% in the second quarter ended June 30, reaching $1.64 billion, up from $1.10 billion in the year-ago period, the web-only furniture retailer reported on Thursday.
Wayfair’s inaugural one-day sales holiday, Way Day, which took place on April 25 contributed to the retailer’s sales gain. Wayfair says the event was its biggest revenue day ever in the history of the company.
Plus, even with this large sales event, “Wayfair traffic trends show continued strength post Way Day,” says Colin Sebastian, a senior research analyst at Baird.
Private-label brands are also an increasing part of Wayfair.com’s revenue, accounting for 57% of Wayfair.com revenue in 2017, up from just 6% in 2015. Wayfair has more than 70 propriety house brands, which are a variety of styles and price points, including the brands Trent and Austin, Mercury Row, Breakwater Bay and Threeposts.
Wayfair, however, has yet to turn a profit, and the retailer took a net loss of $100.7 million this quarter, up 158.9% from a $38.9 million loss in the same period a year ago. Increases in Wayfair’s global operations, its logistics network of warehouses, transportation and delivery, plus hiring employees, continues to eat into its business.
The Wayfair-controlled logistics network increases efficiencies and improves customer satisfaction, which will drive higher customer lifetime value, Wayfair reports. “We plan to take greater control of middle and last-mile delivery with continued investment in new facilities, both in the U.S. and internationally,” Wayfair reported.
As of June 2018, 90% of Wayfair’s U.S. large parcel orders went through Wayfair’s controlled middle-mile network, which it calls the Wayfair delivery network, and 63% of U.S. large deliveries went through Wayfair’s last-mile home delivery network. An average large parcel for Wayfair is 80 lbs. and 22 cubic feet.
In the first half of the year, Wayfair has increased its employees by 1,300 to help accelerate growth, CEO Niraj Shah said to investors, according to a Seeking Alpha transcript.
“To accelerate our growth in new categories, we have been hiring new people to develop dedicated cross-functional teams across areas, including merchandising, marketing and engineering, as well as specialized customer service staff,” Shah said.
International e-commerce sales totaled $243.9 million in Q2, up nearly 94% from $125.8 million in Q2 2017. Canada generates the most sales, followed by the U.K. and Germany.
For the second quarter ended June 30, Wayfair reports:
- E-commerce revenue of $1.64 billion, up 49.1% from $1.10 billion in Q2 2017.
- Net revenue of $1.66 billion, a 48.2% increase from $1.12 billion.
- Net loss of $100.7 million, compared with a loss of $38.9 million.
- 49.2% of e-commerce orders were placed on a mobile device, compared with 44.1%.
- Repeat customers placed 66.0% of orders, compared with 61.3%.
- Average order value was $254, down 1.6% from $258.
- 12.8 million active customers, up 34.7% from 9.5 million.
For the first six months ended June 30, Wayfair reported:
- E-commerce revenue of $3.03 billion, up 48.5% from $2.04 billion from the first six months of 2016.
- Net revenue of $3.10 billion, up 49.0% from $2.08 billion.
- Net loss of $208.5 million, compared with a loss of $95.4 million.
Wayfair is No. 13 in the Internet Retailer 2018 Top 500.Favorite