Wayfair Gains Amid Pandemic-Driven Third-Quarter Earnings Boost

Wayfair shares gain following earnings and sales that beat analysts’ forecasts amid the pandemic-driven, work-from-home movement.

Wayfair  (W) - Get Report traded higher on Tuesday after the online home-decor store posted earnings and sales that beat analysts’ forecasts as the pandemic and work-from-home movement spurred consumers to buy goods for their houses.

The Boston-based company said it earned $173.2 million, or $2.30 a share, in the third quarter, vs. a loss of $272 million, or $2.23 a share, in the year-earlier quarter. The per-share earnings number came in well above analysts’ forecasts of 82 cents a share.

Sales jumped more than 66% to $3.8 billion, up from $2.3 billion a year ago and also above analysts’ forecasts of $3.7 billion. Cash, cash equivalents, and short- and long-term investments totaled $2.6 billion, the company said.

“In the midst of continued uncertainty about the economy and the pandemic, Wayfair delivered another quarter of strong operating and financial results in Q3,” said CEO Niraj Shah, noting the company expects “the home to be even more important than usual when it comes to celebrating the holidays this year.”

The company didn't provide fourth-quarter or full-year guidance.

Wayfair said active customers in its direct retail business hit 28.8 million as of the end of September, an increase of 50.9% year over year. LTM, or “last twelve months” net revenue per active customer was $451 as of Sept. 30, a gain of 0.4% year over year.

Repeat customers placed 11.3 million orders in the third quarter of 2020, an increase of 84.4% year over year. On a percentage basis, that translated into repeat customers placing 71.9% of total orders compared to 67.3% in the same period last year.

Average order value was $243 for the third quarter of 2020, compared to $252 for the third quarter of 2019, with 60% of total orders delivered placed via a mobile device, compared to 53.8% in the third quarter of 2019.

Shares of Wayfair were up initially up more than 12% in premarket trading. In regular trading the shares were 8.07% at $276.50. 

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