Wayfair Inc . (NYSE: NYSE:W), one of the world's largest destinations for the home, today reported financial results for its second quarter ended June 30, 2024.Total net revenue for the second quarter decreased 1.7% year-over-year to $3.1 billion, missing analysts' estimates of $3.18 billion.
Investors reacted negatively to the earnings miss, with Wayfair's stock price dropping 4.9%.
This revenue decline was primarily driven by a 2.0% decrease in U.S. net revenue to $2.7 billion and a modest 0.3% increase in international net revenue to $387 million.
Despite the revenue miss, Wayfair reported a narrower net loss of $42 million compared to a loss of $46 million in the same quarter last year. This improvement in profitability was primarily due to stricter operating discipline, as evidenced by the company generating its best quarter of Adjusted EBITDA and Free Cash Flow in the last three years. Adjusted EBITDA came in at $163 million, exceeding analysts' estimates, while Free Cash Flow reached $183 million.
The company's active customer base grew by 0.9% year-over-year to 22.0 million as of June 30, 2024. However, the average order value declined slightly from $307 in Q2 2023 to $313 in Q2 2024. Additionally, orders delivered decreased by 2.9% year-over-year to 10.0 million.
Niraj Shah, CEO, co-founder, and co-chairman of Wayfair, commented on the quarter's results, highlighting the challenging macro environment and its impact on consumer spending patterns. He emphasized the company's focus on operational efficiency and profitability, stating that Wayfair is "running the business with the goal of demonstrating substantial growth in profitability this year, even as the top line remains challenging."
Key takeaways from the earnings report include:
- Revenue missed analyst estimates, decreasing by 1.7% YoY to $3.1 billion.
- Despite the revenue miss, the company reported an improvement in profitability with a narrower net loss and better-than-expected Adjusted EBITDA and Free Cash Flow.
- Active customer growth remained steady, but average order value and orders delivered declined slightly.
- Management remains focused on driving profitability and efficiency amid challenging market conditions.
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