Wayfair stock is down 20% in premarket today: how come?

on Feb 24, 2022
  • Wayfair says it lost more money in Q4 than the Wall Street had expected.
  • CEO Niraj Shah still expressed confidence in the future of the company.
  • Shares of the eCommerce home retailer are down nearly 20% in premarket.

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Shares of Wayfair Inc (NYSE: W) were down nearly 20% in premarket trading after the eCommerce home retailer said it lost more money in the fiscal fourth quarter than what the Wall Street had expected.

Notable figures in the Q4 report

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  • Net loss in Q4 printed at $202 million that translates to $1.92 per share.
  • In the same quarter last year, Wayfair had posted $24 million in net income or 23 cents a share.
  • On an adjusted basis, the U.S. firm lost 92 cents per share.
  • At $3.252, quarterly revenue noted a year-over-year decline of roughly 11%.
  • U.S. revenue was down 8.8% and international 23%.
  • FactSet consensus was for 70 cents of adjusted per-share loss on $3.282 billion in revenue.

Wayfair was pretty much in freefall last year, with the stock now down about 70% since April 2021. It trades at a PE multiple of 141 at present. The company announced key executive hires a week ago.

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CEO Shah’s comments

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In the recent quarter, Wayfair noted a 12.5% annualised decline in active customers to 27.3 million, but average order value jumped 21% YoY. In the earnings press release, CEO Niraj Shah said:

While consumer behaviour has changed repeatedly throughout the pandemic, the primary elements for success in our category have not. Secular trends favour a long and durable shift to eCommerce. Wayfair has only just begun to scratch the surface of this vast opportunity.

Revenue for fiscal 2021 as a whole was down 3.1%. The Boston-based company ended the year with $2.40 billion in cash, cash equivalents and short-term investments. The chief executive added:

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In the last two years, we’ve grown our topline by over 50% without increasing headcount, which demonstrates scalability and attractive structural economics of our business. We’re continuing our high ROI initiatives and are ready to navigate the macro environment with a strong balance sheet.

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