Shares of Wayfair (W -3.23%), the online home furnishings retailer, were among the losers on the stock market this week. News on the company itself was minimal, but the Fed's decision to trim its rate-cut forecast for next year -- from four cuts to two -- hit interest-rate-sensitive stocks like Wayfair hard.As of 11:59 a.m. ET, the stock was down 15.5% for the week, according to data from S&P Global Market Intelligence. What's happening with WayfairWayfair has struggled since the end of the pandemic, as the ...

After the stock market's strong returns this year, it's challenging to find stocks that have fallen. Growth stocks, in particular, have had a good run. The S&P 500 Growth Index has gained 40.4% this year (through Dec. 16). That's more than 28 percentage points higher than the S&P 500 Value Index's 11.9%.Wayfair (W -3.25%) performed well during the early days of the pandemic with high revenue growth. The company rewarded shareholders with outsized gains. But times have been challenging more recently, and the ...

Core Viewpoint - The housing market is showing early signs of improvement, which could positively impact companies like Wayfair that have underperformed in the past year [1][2]. Group 1: Company Performance - Wayfair's stock has declined nearly 85% from its 2021 peak, with revenue growth moderating after a pandemic-driven surge [2]. - The company reported a 2% year-over-year revenue decline in Q3, but sales are stabilizing above 2019 levels, indicating potential for recovery [5][6]. - Wayfair's quarterly revenue peaked at $4.3 billion in Q2 2020 and has since flattened around $2.8 billion, allowing management to focus on profitability [6][10]. Group 2: Cost Management - Wayfair has improved its free cash flow, which was negative $1.1 billion in Q4 2023 but has returned to positive territory at $43 million [8]. - Management attributes this improvement to better cost efficiency and spending discipline, achieving a positive adjusted EBITDA margin in the last two quarters [9]. Group 3: Market Opportunities - A recent report indicates that 82% of consumers are open to shopping for home decor items online, positioning Wayfair as a leading destination in this market [11]. - The current share price of $54 results in a price-to-sales (P/S) ratio of 0.55, which is attractive compared to typical discount retailers [12]. - If Wayfair can achieve 10% annual revenue growth, its P/S multiple could increase significantly, leading to a substantial rise in stock value [12].

Prime is a membership program from e-commerce giant Amazon, and its importance to the company is probably under-appreciated. With Prime, members get fast free shipping, as well as access to streaming video content and more. In short, there are benefits to being a Prime member, and they've helped drive adoption at Amazon.Home-goods e-commerce platform Wayfair (W 1.83%) hopes that a membership program of its own can provide the same boost.On Oct. 22, Wayfair launched Wayfair Rewards, a loyalty program that co ...

This leader in home goods and furniture e-commerce is down but not out.Wayfair (W -0.61%) recently marked the 10th anniversary of its Oct. 2014 initial public offering at $29 per share. Unfortunately for shareholders of the e-commerce giant, the milestone is a bitter one. At the time of this writing, the stock's $40 price marks an 89% decline from the all-time high of $369 it reached in early 2021. Lower sales and large financial losses have been a recurring theme in recent years.The headline numbers don't ...

Rising interest rates weighed on the stock last month.Shares of Wayfair (W -8.80%) were moving lower last month as the online home-furnishings retailer was stung by rising interest rates and a weak earnings report at the beginning of November.Wayfair has struggled since its pandemic-era boom as Americans have sharply scaled back on home-related spending due to high interest rates and the lock-in effect of low mortgage rates during the pandemic, which has brought existing home sales to their lowest point in ...

Company Overview - Wayfair reported a 2% year-over-year decline in revenue to $2.9 billion and incurred a GAAP loss of $74 million in its third-quarter earnings report [2] - The company aims to deliver adjusted EBITDA above share-based compensation and capital expenditures, reporting an adjusted EBITDA of $119 million [2] Industry Context - The home furnishings sector, including competitors like RH and Williams-Sonoma, has faced revenue declines amid a broader slowdown in the housing market due to high mortgage rates [4] - Existing home sales are approximately 40% below pre-pandemic levels, indicating a challenging environment for the sector [5] Macro Conditions - The federal funds rate is expected to decrease further, which should lower mortgage rates and potentially revive home-buying activity [5] - A significant housing shortage exists in the U.S., with millions of homes needed, and future political efforts may incentivize new home construction, benefiting companies like Wayfair [6] Company Strategy - Wayfair has streamlined its operations during the downturn, including recent layoffs, to prepare for a market recovery [7] - The company launched a new rewards program costing $29 annually, aiming to replicate the success of Amazon Prime by offering free shipping and 5% back on purchases [7] Recovery Potential - Wayfair's stock is down nearly 90% from its pandemic peak, trading at a price-to-sales ratio of 0.4, suggesting significant recovery potential if sales growth and profitability improve [8] - The stock has a forward price-to-earnings ratio of 30, based on analyst consensus for earnings per share of $1.34 next year, indicating room for growth as the housing market recovers [8]

Wayfair (W) reported third-quarter 2024 non-GAAP earnings of 22 cents per share, beating the Zacks Consensus Estimate by 46.67%. The company reported a loss of 13 cents per share in the year-ago quarter.Net revenues of $2.88 billion beat the consensus mark by 0.04%. The top line decreased 2% year over year.Last Twelve Months (LTM) net revenues per active customer decreased 1.3% year over year to $545, which beat the Zacks Consensus Estimate by 5.17%.Further, the active customer base declined. The metric dec ...

Revenue Performance - Net revenue decreased by 2.0% to $2.884 billion in Q3 2024 compared to $2.944 billion in Q3 2023, driven by lower order volume[104][112] - U.S. net revenue decreased by 2.3% to $2.512 billion in Q3 2024, while international net revenue remained constant at $372 million[112][113] - Net revenue decreased by $159 million (1.8%) to $8,730 million in the nine months ended September 30, 2024, driven by lower order volume and macroeconomic pressures[133] Customer Metrics - Active customers remained flat at 22 million, with 79.9% of orders coming from repeat buyers in Q3 2024[104] - Average order value increased to $310 in Q3 2024 from $297 in Q3 2023[111] - Orders delivered decreased to 9 million in Q3 2024 from 10 million in Q3 2023[111] - LTM net revenue per active customer increased to $545 in Q3 2024 from $538 in Q3 2023[111] Cost of Goods Sold and Operating Expenses - Cost of goods sold decreased by 0.8% to $2.011 billion in Q3 2024, but increased as a percentage of net revenue to 69.7% from 68.9% in Q3 2023[114][115] - Cost of goods sold decreased by $69 million (1.1%) to $6,097 million in the nine months ended September 30, 2024, due to operational cost savings and lower order volume[135] - Total operating expenses decreased by $122 million (11.4%) to $947 million in Q3 2024 compared to $1,069 million in Q3 2023, primarily due to reduced compensation costs[117] - Selling, operations, technology, general and administrative expenses decreased by $116 million (19.5%) to $480 million in Q3 2024, driven by lower compensation costs[117] - Selling, operations, technology, general and administrative expenses decreased by $213 million, or 15.0%, for the nine months ended September 30, 2024, compared to the same period in 2023[144] Advertising Expenses - Advertising expenses increased by $17 million (5.0%) to $354 million in Q3 2024, reflecting renewed investment opportunities and changing market conditions[123] - Advertising expenses increased by $27 million (2.7%) to $1,043 million in the nine months ended September 30, 2024, reflecting strategic investments in response to market conditions[143] - Advertising expenses increased to 11.9% of net revenue for the nine months ended September 30, 2024, compared to 11.4% in the same period in 2023[144] Compensation and Related Costs - Equity-based compensation and related taxes decreased by $48 million (33.3%) in Q3 2024 compared to Q3 2023, primarily due to fewer vested restricted stock units[118] - Equity-based compensation and related taxes decreased by $142 million (31.1%) in the nine months ended September 30, 2024, driven by fewer vested restricted stock units[140] - Customer service and merchant fees decreased by $21 million (16.3%) in Q3 2024, excluding equity-based compensation, due to reduced compensation costs[120] - Customer service and merchant fees decreased by $61 million (15.4%) in the nine months ended September 30, 2024, excluding equity-based compensation, due to reduced compensation costs[141] Financial Performance Metrics - Adjusted EBITDA increased to $119 million in Q3 2024 from $100 million in Q3 2023[111] - Free Cash Flow was negative $9 million in Q3 2024 compared to positive $42 million in Q3 2023[111] - Adjusted Diluted Earnings per Share improved to $0.22 in Q3 2024 from a loss of $0.13 per share in Q3 2023[111] - Adjusted EBITDA for the nine months ended September 30, 2024, was $357 million, compared to $214 million in the same period in 2023[181] - Free Cash Flow for the nine months ended September 30, 2024, was -$19 million, compared to -$64 million in the same period in 2023[185] - Adjusted Diluted Earnings (Loss) per Share for the nine months ended September 30, 2024, was $0.38, compared to -$1.02 in the same period in 2023[191] - Net loss for the nine months ended September 30, 2024, was $364 million, compared to $564 million in the same period in 2023[181] Restructuring and Impairment Charges - Restructuring charges increased by $14 million, or 21.5%, for the nine months ended September 30, 2024, compared to the same period in 2023[146] - Restructuring charges for the nine months ended September 30, 2024, were $79 million, primarily due to one-time employee severance and benefit costs[182] - Impairment and other related net charges decreased by $12 million, or 85.7%, for the nine months ended September 30, 2024, compared to the same period in 2023[145] Cash Flow and Capital Expenditures - Net cash provided by operating activities decreased by $36 million for the nine months ended September 30, 2024, compared to the same period in 2023[170] - Capital Expenditures were 2.0% of net revenue for the nine months ended September 30, 2024, primarily for equipment purchases and improvements in leased warehouses and proprietary technology investments[172] - Cash flows from financing activities decreased by $74 million during the nine months ended September 30, 2024, compared to the same period in 2023, due to the net impact of debt and other financing transactions[174] - Net cash provided by operating activities for the nine months ended September 30, 2024, was $155 million, compared to $191 million in the same period in 2023[185] - Purchase of property and equipment for the nine months ended September 30, 2024, was $53 million, compared to $101 million in the same period in 2023[185] - Site and software development costs for the nine months ended September 30, 2024, were $121 million, compared to $154 million in the same period in 2023[185] Other Financial Metrics - Interest expense, net remained constant at $15 million for the nine months ended September 30, 2024, compared to the same period in 2023[148] - Other income (expense), net increased by $5 million, or 250.0%, for the nine months ended September 30, 2024, compared to the same period in 2023[149] - Gain on debt extinguishment decreased by $100 million, or 100.0%, for the nine months ended September 30, 2024, compared to the same period in 2023[151] - Provision for income taxes, net increased by $2 million, or 33.3%, for the nine months ended September 30, 2024, compared to the same period in 2023[153] - Cash and cash equivalents and short-term investments totaled $1.3 billion as of September 30, 2024[155] Market Risk and Other Notes - No significant changes in the company's exposures to market risk since December 31, 2023[198]

Wayfair Inc. (NYSE:W) Q3 2024 Earnings Conference Call November 1, 2024 8:00 AM ET Company Participants James Lamb - Head of IR Niraj Shah - CEO, Co-Chairman & Co-Founder Kate Gulliver - CFO & Chief Administrative Officer Steve Conine - Co-Chairman & Co-Founder Conference Call Participants Ygal Arounian - Citi Christopher Horvers - JPMorgan Peter Keith - Piper Sandler Simeon Gutman - Morgan Stanley Brian Nagel - Oppenheimer Curtis Nagle - Bank of America Colin Sebastian - Baird Oliver Wintermantel - Evercor ...