Wayfair blows past Wall Street estimates for earnings and revenue in Q3

Written by: Wajeeh Khan
November 4, 2020
  • Wayfair blows past Wall Street estimates for earnings and revenue in Q3.
  • The e-commerce home retailer reports £131.98 million of net income.
  • The number of direct customers jumped 50.9% in the fiscal third quarter.

Wayfair Inc. (NYSE: W) said on Tuesday that its earnings in the fiscal third quarter came in better than expected. In the prior quarter (Q2), Wayfair had revealed a massive 84% year over year growth in its revenue, as per the report published in the first week of August.

Wayfair was reported about 1% up in extended trading on Tuesday after rallying 13% in premarket trading. Including the price action, shares of the company are now trading at £210.70 versus a sharply lower £71 per share at the start of the year.

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Wayfair’s Q3 financial results versus analysts’ estimates

Wayfair said that its net income printed at £131.98 million in the third quarter, or £1.27 per share. In the same quarter last year, the e-commerce home retailer had reported £207.27 million of loss or £2.24 per share.

On an adjusted basis, the Boston-headquartered company earned £1.75 per share in the recent quarter. In terms of revenue, Wayfair recorded £2.93 billion versus the year-ago figure of a much lower £1.76 billion.

According to FactSet, experts had forecast the company to print £2.79 billion of revenue in the third quarter. Their estimate for per-share earnings was capped at 62.49 pence. In separate news from the U.S., Humana said on Tuesday that its revenue was 23.6% higher in the fiscal third quarter.

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CEO Niraj Shah’s comments on Tuesday

CEO Niraj Shah of Wayfair commented on the earnings report on Tuesday and said:

“Category momentum is vibrant, demand is moving online at an accelerated pace, and we expect the home to be even more important than usual when it comes to celebrating the holidays this year.”

At 28.8 million, the number of direct customers, Wayfair added, saw a 50.9% annualised growth in Q3. 11.1 million or 71.9% of orders, as per the U.S. company, were placed by repeat customers. But Wayfair said that the average order value contracted from £192.03 last year, to £185.17 in the recent quarter.

Wayfair performed only slightly upbeat in the stock market last year with an annual gain of close to 3%. At the time of writing, the American e-commerce company that sells furniture and home-goods has a market cap of £19.93 billion.