Wayfair’s net loss widens despite a 20% increase in sales in Q1

Wayfair Inc. (NYSE: W) released its quarterly financial results on Tuesday that posted a 20% increase in its sales in the first quarter. The company, however, reported its net loss to have widened in Q1. Following the release of the earnings report, Wayfair was reported roughly 3% down in premarket trading on Tuesday.

Wayfair’s Q1 financial results versus analysts’ estimates

According to Refinitiv, analysts had anticipated the company to print £1.85 billion in revenue in the first quarter. In terms of adjusted loss per share, they had estimated £2.09. In its report on Tuesday, Wayfair beat both estimates recording a slightly higher £1.87 billion in quarterly revenue and a lower loss of £1.85 (adjusted) per share.

According to CEO Niraj Shah:

“The broader market disruption has highlighted the many differentiated advantages we have built as the e-commerce leader in Home over the last two decades. We are making significant strides toward profitability by driving gross margin expansion, increasing marketing efficiencies, and gaining leverage on operating expenses.”

At £229.50 million, the online furniture retailer’s net loss came in wider than £160.87 million in the same quarter last year. On the revenue front, the company registered an increase from £1.56 billion last year to £1.87 billion in the recent quarter.

Wayfair said delivered orders surged 21% on an annualized basis to 9.9 million in the first quarter. 6.9 million orders, the company added, came from repeat customers that marked a 28% year over year increase. In the quarter that ended on 31^st March, Wayfair’s orders were priced at £188.65 on average that is £1.61 lower than the year-ago figure.

At the end of Q1, the retailer boasted roughly £715 million in cash and cash equivalents including the company’s investments (both short and long term).

Wayfair is practicing no-contact delivery

Wayfair had its initial public offering (IPO) in October 2014. The company has not reported a profit in almost 6 years while its losses continue to expand with each quarter. Wayfair is widely criticized for its extravagant spending on online advertisements to attract more customers.

During Coronavirus, Wayfair is practicing no-contact delivery that doesn’t require a signature for boxes. Drivers are strictly recommended to wash hands and use sanitizer before each delivery. The company is also monitoring the temperature of its workers at the distribution facilities on a daily basis.

The £10.16 billion furniture retailer is currently more than 40% up year to date in the stock market.