Wayfair Reports Net Loss of Nearly $320 Million, Customer Decline
Wayfair shares tumbled more than 20 percent Thursday morning after the online furniture retailer reported larger-than-expected losses in the first quarter as shoppers scaled back their spending on the home category, CNBC reports. On Thursday, the retailer reported a first quarter net loss of $319 million, or $3.04 per share, compared with net income of $18 million, or 16 cents a share, a year earlier. For the three-month period ended March 31, net revenue fell nearly 14 percent year-over-year to $3 billion. Wayfair's active customers in the first quarter of 2022 declined 23.4 percent from a year ago, to 25.4 million. Active customers represent shoppers who purchased at least once directly from Wayfair in the preceding 12-month period.
Wayfair also announced its chief financial officer, Michael Fleisher, is set to retire early next year. Kate Gulliver, Wayfair's chief people officer, will be moving into the CFO role in November. Fleisher will remain at the company for a transition period until next January, it said.
Total Retail's Take: The gains Wayfair experienced at the height of the pandemic appear to have been temporary. Like other home goods retailers, Wayfair was a massive beneficiary during the pandemic as consumers shifted their spending to the web and bought up fresh home décor and office furniture. But it’s struggled with supply chain complications that have resulted in order delays and frustrated shoppers.
In addition, as pandemic restrictions eased, consumers began shifting spending away from the home to other areas, particularly experiences. Shoppers are "diverting a larger share of their wallets to non-discretionary categories, and reprioritizing experiences like travel. Reflecting these trends within our business we’re seeing more strength from luxury and professional customers vis-à-vis mass shoppers,” said Wayfair CEO Niraj Shah. Factors like inflation and rising fuel prices are causing many consumers to pull back spending. “Our mass customers in the U.S. and internationally appear, understandably, more focused on where they are spending their next dollar, pound or euro,” Shah said.
Shah said Wayfair is focused on returning to profitability on an adjusted earnings before interest, taxes, depreciation and amortization basis. “The companies that will be most successful in navigating this dynamic environment are those that can act with agility,” Shah said in a press release.
Kristina Stidham is the digital content director at Total Retail and sister brands Women in Retail Leadership Circle and Women Leading Travel & Hospitality at NAPCO Media. She is passionate about digital media and handles video, podcast and virtual event production for all brands. You can often find her at WIRLC, TR, WLT&H or industry events with her camera and podcasting equipment—or at home on Zoom—recording interviews with thought leaders and business executives.
Kristina holds a B.A. in Media Studies and Production from the Temple University Klein College of Media and Communication in Philadelphia. Go Owls! When she's not in the office, she loves to go on long walks, sing around the house, hangout with her family and two pet guinea pigs, and travel to new places.