Wayfair Revenue Soars While Earnings Disappoint

It was a mixed bag on Wayfair’s Q1 earnings call last week.

Revenue was undeniably on the upswing, rising 76.1 percent year-over-year and well in excess of the $694.85 million Wall Street analysts were predicting in advance of the release. But earnings were a less rosy picture, with the firm reporting a share price loss of 36 cents, as opposed to the 33 cent net loss per share that was forecast before earnings were published.

The street was less than totally enamored of the result, and the firm’s stock price fell to $35.01 a share.

And while Wall Street is less than ebullient about the report, Wayfair’s CEO Niraj Shah certainly seems satisfied.

“We are excited to report yet another quarter of exceptional revenue growth as we continue to take about 40% of the U.S. online dollar growth in our categories in the last 12 months. We are seeing tremendous traction with both new customer growth and repeat purchases as we focus on leveraging technology and innovation to reinvent the way customers shop for home and build a truly differentiated retail experience.”

Wayfair’s direct retail revenue clocked in at $711.80 million – a 92.7 percent increase over a year ago.  While that is still a decline from the first quarter, it is worth noting Q4 growth was in the 97.8 range, a hard figure to beat, and came during the traditional rich holiday season.

Wayfair also saw some of its earnings depressed by a continued push onto the international stage, with growth in Canada, the United Kingdom and Germany all on the menu for the home goods firm.

Those large investments are eating into the company’s earnings, but Shah said it’s for long-term gain.

“We’re only interested in taking things on where a long-term outcome can be a very significant business,” he said on the call. “… If we invest in something, we’re going to do it to win.”