Wayfair’s second quarter results were well ahead of estimates due to “unprecedented demand” as the hit 26 million active customers working on home and home office projects as education and work went remote.
Amid the COVID-19 pandemic, furniture retailing moved online. Wayfair said second quarter revenue was $4.3 billion, up 83.7% from a year ago, with net income of $273.9 million, or $2.54 a share. Non-GAAP earnings for the second quarter were $3.13 a share.
Wall Street was expecting non-GAAP second quarter earnings of $1.04 a share on revenue of $4.06 billion.
Wayfair’s second quarter highlighted how the company has been able to generate operating leverage and deliver profits. The company’s US revenue was up 82.5% and international sales were up 90.5% off a smaller base.
CEO Niraj Shah said:
The second quarter was a very strong period for Wayfair. Our strategic long-term investments positioned us well to serve our customers and to quickly adapt during a challenging time. We experienced unprecedented demand in Q2 and saw record numbers of new and repeat customers choose Wayfair.
By the numbers:
- Active customers for direct retail were 26 million, up 46% from a year ago.
- Orders per customer were 1.89 in the second quarter.
- Repeat customers placed 67.4% of total orders in the second quarter.
- Average order value was $227 in the second quarter, down from $255 a year ago.
- 60.6% of orders were placed on a mobile device.
On a conference call, Shah said:
While it’s difficult to pinpoint precisely, we believe the home goods category in total remained relatively resilient over the last several months. Consumers deprioritized expenses such as travel and entertainment and shifted their focus and discretionary spending to their homes. We see evidence of this in strong and consistent demand across nearly all of the product classes we sell, not just those directly linked to having to shelter or work from home.
In the quarter, we activated nearly 5 million net new customers, more than the last 4 quarters combined.
Shah did say that economy reopenings have moderated deamd somewhat, but demand remains elevated. He also said that Wayfair continues to build out its logistics network and its hybrid model was able to mitigate shipping delays across carriers. “Wayfair is now large enough and strong enough to both be profitable and to continue to invest with a long-term horizon,” he said.
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