Wayfair Inc. reported earnings results from the third quarter ended Sept. 30. Total net revenue increased 3.7% to $2.9 billion.
The online furniture retailer reported a larger increase in U.S. net revenue, which grew 5.4% to $2.6 billion. Meanwhile, international revenue declined 7.0% over the same period. Net loss was $163 million.
Wayfair ranks No. 10 in the Top 1000, Digital Commerce 360’s ranking of the largest online retailers in North America.
“We executed further in the third quarter to produce consistent profitability — with Adjusted EBITDA now positive on a trailing 12-month basis — while also driving demonstrable market share growth, as evidenced by our gains on customers and orders,” CEO Niraj Shah said in a statement. “Even with a turbulent macro, we remain committed to our profitability goals in good times and bad.”
Wayfair leans on promotions
Consumers are careful with their spending this year, and reluctant to make a purchase until they see a good deal, Niraj Shah told investors in an earnings call. Once the deal pulls them in, though, they start to shop around, he says. During promotional events, less than one-third of revenue comes from the featured products, he told investors.
Wayfair is using promotions to draw in customers year-round, Shah says. For example, the online retailer created a promotion in its app for National Dog Day over the summer that drove double-digit increases in click-through rates, conversions, and sales, he says. The retailer also held a second Way Day event in late October.
Wayfair’s suppliers are also discounting products as a way to clear out inventory. That allows Wayfair to purchase the inventory at lower prices and mark them down for consumers, gaining market share.
Wayfair says a slow housing market isn’t a dealbreaker
While a slowdown in the U.S. housing market has hurt home goods retailers, Shah says that doesn’t have a major impact on Wayfair. While some customers do go to Wayfair to outfit a new home, that’s not the typical customer experience, he says.
The average Wayfair customer spends $540 with the retailer annually, spread across two orders.
“This isn’t someone that’s typically refitting an entire room or house. Instead, they’re a shopper that’s going through their home item by item, project by project making small updates on a much more frequent cadence,” he says. Moreover, Wayfair is well positioned to be the retailer consumers choose when they redo a room in their existing home, Shah says.
Headwinds facing the home category were largely offset by Wayfair’s gains in market share, according to an analyst note from consumer research firm Baird Equity Research.
For the fiscal third quarter ended Sept. 30, Wayfair reported:
- Total net revenue grew 3.7% to $2.9 billion.
- Net loss was $163 million.
- Active customers declined 1.3% to 22.3 million.
- Repeat customers made 79.7% of all orders, up from 77.8% in Q3 last year.
For the nine months ended Sept. 30, Wayfair reported:
- Net revenue declined 2.5% to $8.9 billion.
- Net loss was $564 million, down from $$980 million in 2022.
- Active customers declined from 23 million to 22 million.
Percentage changes may not align exactly with dollar figures due to rounding.
Check back for more earnings reports.
Do you rank in our databases?
Submit your data and we’ll see where you fit in our next ranking update.
Stay on top of the latest developments in the ecommerce industry. Sign up for a complimentary subscription to Digital Commerce 360 Retail News. Follow us on LinkedIn, Twitter and Facebook. Be the first to know when Digital Commerce 360 publishes news content.Favorite