Wayfair Stock Surges on Narrower-Than-Expected Fourth-Quarter Loss While Revenue Surges 41%

10:53 AM, Feb 22, 2019 — Wayfair (W) shares rose on Friday and hit a record high on an intraday basis as the online home furnishings firm reported a narrower-than-expected loss for the fourth quarter while revenue surged.

The non-GAAP loss was $1.12 a share, narrower than the Capital IQ consensus for a loss of $1.30, but still wider than the year ago $0.58 a share. Direct retail net revenue, which consists mainly of sales generated through Wayfair’s websites, climbed 41% to $1.99 billion, ahead of the Street’s views for $1.97 billion.

Niraj Shah, Wayfair’s co-founder and chief executive, said the fourth quarter was a record, “which represented the largest year over year dollar growth in a single quarter in our history,” according to a statement Friday. “We remain focused on our long-term approach to investing in the business, and believe the company’s outsized growth at scale is a testament to the strength of our brand and platform as we redefine the shopping experience in our category.”

The stock rallied more than 30% on Friday.

Wayfair saw the number of active customers in its direct retail business rise 38% year-on-year to 15.2 million as of Dec. 31. Repeat customers placed 66.4% of total orders in the fourth quarter from 62.4% in the same period a year earlier. Orders delivered rose 42% to 8.8 million, but the average order value dipped to $227 from $229 in the same period of 2017.

The company’s cost of goods sold jumped to $1.53 billion from $1.1 billion a year earlier, and Wayfair spent more on customer service and merchant fees, advertising and selling, operations, technology, general and administrative expenses.

Shah said the company is seeing parallels in its businesses in Canada, the UK and Germany to the course of Wayfair.com in the US when it was in similar development stages.

“We continue to expand our proprietary logistics infrastructure and take greater control of our inbound supply chain,” he said. “In 2019, we look forward to building upon the strength we see across our business today as we continue to innovate in creating the best possible shopping experience for home.”

Companies: Wayfair Inc.
Price: 154.85 Price Change: +37.57 Percent Change: +32.04

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