Wayfair Inc. reported a slight revenue drop year over year for its fiscal Q2, which ended June 30.
The quarter included Wayfair’s annual sales period, called Way Day, which this year ran May 4 to 6. Wayfair CEO Niraj Shah said Way Day 2024 “was a tremendous success, with performance up in the double digits versus our event last spring,” though he did not provide more details. Since Way Day, he said, Wayfair made a decision “to intentionally pare back on marketing spend” to improve efficiency during a period with lower customer engagement.
“Q2 was a continuation of the macro trends we’ve been seeing for the last few years,” Shah said on an earnings call with investors. “Customers remain cautious in their spending on the home and our credit card data suggests that the category was down by nearly 25% from the peak we saw in the fourth quarter of 2021.”
Wayfair is No. 10 in the Top 1000 Database, Digital Commerce 360’s ranking of North America’s largest online retailers. It’s the largest Housewares & Home Furnishings online retailer in North America. Digital Commerce 360 projects Wayfair’s full-year ecommerce sales to reach $12.19 billion in 2024.
Wayfair web sales by year
Wayfair revenue Q2 2024
Total Wayfair revenue in Q2 2024 reached $3.1 billion. That’s a 1.7% (or $54 million) year-over-year decrease. In the U.S., specifically, Wayfair revenue was $2.7 billion in Q2 2024. That’s down a similar $55 million (or 2.0%) year over year.
Internationally, Wayfair revenue grew slightly, up $1 million or 0.3% year over year, to $387 million.
Meanwhile, Wayfair gross profit was $941 million, which is 30.2% of total net revenue. In January, Wayfair announced layoffs for 1,650 employees, who at the time represented 13% of its total workforce and 19% of corporate workers. The news had come weeks after Shah announced Wayfair became profitable again.
Other highlights from Wayfair’s Q2 2024 earnings
- The number of Wayfair active customers increased slightly, at a rate of 0.9% year over year, to reach 22.0 million, as of the end of Q2. “Active customer” refers to someone who made a purchase from the retailer in the last 12 months.
- Average order value grew slightly, to $313 from $307 the year before.
- Wayfair net revenue per active customer was $540. That’s down 0.9% year over year.
- Orders per customer increased slightly, to 1.85 in Q2 from 1.82 in the prior-year period.
- 63.7% of all orders were via mobile device, up from 61.6% the prior year.
Wayfair sales initiatives, including store openings
In February 2024, Shah spoke to investors on a Q4 earnings call about upcoming Wayfair sales initiatives. Among them was a brand refresh, which it launched in March, during its fiscal Q1. The second was opening its first Wayfair store in May, which is in Wilmette, Illinois — a northern suburb of Chicago. Later this year, Shah said, Wayfair will launch a loyalty program.
He said despite shifts to spend digitally as a result of the COVID-19 pandemic, Wayfair still views the Housewares & Home Furnishings category “as quite underpenetrated online at roughly a quarter of spending in the category.”
“Even in a more mature state that approaches something closer to a 50-50 split, that still leaves hundreds of billions of dollars in addressable market opportunity on the physical side of the equation,” Shah said. “We don’t want to leave this opportunity untapped.”
He added that Wayfair is focusing on three key goals relating to customer experience as it expands its physical retail operations:
- Capturing incremental share of wallet, as Wayfair broadens customer awareness.
- Reaching a new segment of customers that have been reticent to shop for the category online.
- Building brand awareness and driving customer affinity.
“Our physical retail operating model mirrors the approach we take online,” Shah said. “Inventories owned by our suppliers and our take rate on top of the supplier’s wholesale price drives our gross margins.”
Although the Wilmette store is Wayfair’s first standalone location, it has also sold in physical stores via mall-based pop-up shops, in a mall in Boston, and through specialty retail stores. Wayfair is also working on opening its next store, Shah said.
“A core part of our strategy is building a bridge to help shoppers make the leap from the physical store experience to our online platform,” he added.
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