Way better: Customer count rises for Wayfair in Q1 while losses moderate
Wayfair ended its first quarter "on an upswing," with active customers numbers up and revenue losses moderating to 1.6% vs. the same quarter in 2023.
BOSTON — Wayfair picked up customers in the first quarter and marked its sixth straight quarter of outperforming the category with a net revenue loss of less than 2%.
The predominantly online home goods retailer saw its active customers jump by 2.8% year-over-year to 22.3 million for the period ended March 31, while net revenue was down 1.6% for total of $2.7 billion. Of that, U.S. net revenue was down 1% to $2.4 billion, and international fell by 5.8% to $338 million. Adjusted EBITDA was $75 million for the quarter vs. a $14 million loss in Q1 2023.
For the first quarter, gross profit at Wayfair equaled 30% of total net revenue, or $819 million. The diluted loss per share was $2.06 vs. $3.22 in the same quarter in 2023; non-GAAP adjusted diluted loss per share was 32 cents. Net cash used in operating activity for the quarter was $139 million.
“The first quarter ended on an upswing,” said CEO Niraj Shah, who is also co-founder and co-chairman. “Our revenue was down just under 2% year-over-year for Q1, which marks our sixth straight quarter of share gain,” he said, while adding “customer growth is once again positive and accelerating compared to last quarter.”
Although orders delivered in the first quarter were down 1% year-over-year, repeat customers placed 80.5% of total orders delivered in Q1 vs. 79.1% in Q1 2023. Average order value was basically unchanged: 285 vs. $287 a year ago. Use of mobile devices for ordering rose incrementally to 63.1% of total orders vs. 62.1% in Q1 2023.
During the earnings call, Shah said the trend has been for mobile to take shares of desktop, although Wayfair still sees value in its online presence because the nature of selling some products relies on bigger screen functionality.
Shah also sees positive movement among its vendor partners. “We’re seeing suppliers introducing large groups of new products into their catalogs as they look to build momentum for the next stage of growth,” he said. “Across the board, we’re hearing their enthusiasm to partner with Wayfair and substantial interest to lean-in behind our entire offering: joining our curated brands, being featured in our promotional events, leveraging our fulfillment solutions, taking advantage of supplier advertising and having shelf space in our stores.”
Asked during the earnings call about what he saw coming out of High Point Market, Shah said suppliers are seeing demand getting concentrated in a small group of retailers, and he pointed to Wayfair as one of those.
“Their (suppliers) future is tied to the ones who win,” he said, whether that’s Wayfair or a regional brick-and-mortar store that is outperforming competitors. He said suppliers were forward looking, introducing more new products this market after working through excess inventory.
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