Home Tough COVID Comps Hit Wayfair Second-Quarter Sales
August 6, 2021
Tough COVID Comps Hit Wayfair Second-Quarter Sales

By Mike Duff

Contributing Editor

Wayfair sales and earnings slipped in the second quarter, but the e-tailer pointed out that the recent results were stronger than in the pre-pandemic period in 2019.

Wayfair net income was $130.4 million, or $1.14 per diluted share, versus $273.9 million, or $2.54 per diluted share, in the 2020 second quarter ended June 30. Net income adjusted for one-time events was $230.8 million, or $1.89 per diluted share, versus $375.1 million, or $3.13 per diluted share, in the year-before period.

Adjusted diluted earnings per share beat a Zacks Investment Research analyst average estimate of $1.18.

Net revenues slipped to $3.86 billion from $4.3 billion and income from operations decreased to $145.2 million from $300 million in the year-prior quarter.

Active customers reached 31.1 million as of June 30, up 19.6% year over year.

For the 2019 quarter, and before the COVID-19 pandemic struck, Wayfair posted net revenues of $2.34 billion and a loss of $181.9 million.

Niraj Shah, Wayfair CEO, co-chairman and co-founder, said in a conference call that consumer finances in the United States are in good shape and interest in the home remains strong even if spending shifts somewhat as restrictions to movement wane in an environment where COVID-19 responses have less impact on in-store shopping then they did in the second half of last year.

He noted, however, that the company’s annual Way Day event in the second proved to be the biggest in the company’s history, and he added that Wayfair customers tend to shop one item, one room and one project at a time. So, even if the balance of spending changes, consumers always have updates to the household environment in mind as their domestic circumstances evolve. Shah asserted that Wayfair should grow faster as category demand shifts structurally online. In that case, with approximately 20% consumer penetration in its most developed geography and set of classes, Wayfair has a long runway ahead to capture more of the growing online share in the home category.

 “Wayfair delivered $3.9 billion in net revenue in Q2, well above pre-pandemic run-rates, even as we began to lap the early heights of COVID-related lockdowns in 2020,” Shah said. “While the current macro environment is dynamic, the home remains a high priority for our customers and longer term tailwinds to online category growth are firmly in place.”

 

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