Wayfair Inc. Repeat Customers Drive Q4 Earnings Beat

Wayfair Inc. (NYSE:W) early Thursday [Feb 23, 2017 | 7:18am] posted better than expected fourth quarter earnings results, as repeat customers drive a larger percentage of its orders.

Written by StockNews.com

The Boston-based online home goods retailer reported adjusted Q4 EPS of ($0.34), which was $0.16 better than the Wall Street consensus estimate of ($0.50).

Revenues rose 33.1% from last year to $984.6 million, also topping analysts’ expectations for $975.32 million.

Wayfair noted that its gross profit was $238.6 million, or 24.2% of total net revenue in the latest period, as its number of active customers in its Direct Retail business surged 53.9% to 8.3 million.

Meanwhile, LTM net revenue per active customer was $395, up 3.7%.

Repeat customers are driving a greater percentage of Wayfair’s sales these days, with that segment placing 58.0% of the total orders in Q4, versus 54.3% in the year-ago period. Repeat customers also placed 2.7 million orders in the fourth quarter, up 63.1%.

Finally, total Q4 orders delivered jumped 52.8% to 4.7 million.

The company commented via press release:

“We are extremely pleased to report yet another year of exceptional growth with total net revenue up $1.1 billion to $3.4 billion in 2016,” said Niraj Shah, CEO, co-founder and co-chairman, Wayfair. “As we continue to rapidly gain market share in the approximately $600 billion home category across North America and Europe, we are reaping the gains from the large, long-term investments we have been making over the past few years. Our largest investment is in our international business in Canada, the United Kingdom and Germany, where we are starting to see real traction and increased brand awareness. In the U.S., we are also investing in our proprietary logistics network, including CastleGate and the Wayfair Delivery Network, as well as in newer categories, such as home improvement and housewares. Even with this substantial ongoing investment in our U.S. business, the U.S. business continues to deliver strong results. In 2017, our team will continue to innovate at a rapid speed to deliver on a number of strategic initiatives that will solidly reinforce Wayfair’s leadership position as the best place to shop for home.”

...Year-to-date, W has gained 17.72%, versus a 5.70% rise in the benchmark S&P 500 index during the same period.

W currently has a StockNews.com POWR Rating of B (Buy), and is ranked #5 of 35 stocks in the Specialty Retailers category.