Wayfair (W) Reports First Quarter 2022 Losses

Wayfair’s shares fell 26% on Thursday after the online furniture retailer posted a bigger-than-expected loss in the first quarter as shoppers cut their spending on home goods.

Wayfair also announced that its chief financial officer, Michael Fleischer, is set to step down early next year. Keith Gulliver, the current chief of staff, will move to the role of chief financial officer in November. Fleischer will remain with the company for a transitional period until January next year.

Wayfair co-founder and CEO Niraj Shah said that despite declining sales, consumer health remains “relatively strong”.

The retailer has benefited enormously during the pandemic as consumers have moved their spending online and snapped up fresh home decor and office furniture. But the company has faced supply chain complications that have led to delayed orders and frustrated customers.

“The companies that will succeed the most in this dynamic environment are those that can act quickly,” Shah said in a press release.

At one point, the stock hit a 52-week low of $65.32 to close at $67.45.

Wayfair reported that the number of active customers in the first quarter of 2022 decreased by 23.4% year-over-year to 25.4 million. The number of orders per customer was 1.87, compared to 1.98 a year earlier. Orders from regular customers have also fallen since 2021 to 8.1 million, down 26% from a year ago.

Active shoppers are shoppers who have made at least one purchase directly from Wayfair in the previous 12-month period.

For the three-month period ending March 31, Wayfair posted a loss of $319 million, or $3.04 per share, compared to a net income of $18 million, or 16 cents per share, a year earlier.

Excluding one-time items, the company lost $1.96 per share. Analysts were expecting a loss of $1.56 per share, according to a Refinitiv survey.

Sales fell nearly 14% to $2.99 ​​billion from $3.48 billion a year earlier. This coincided with analysts’ estimates.

US net revenue fell 9.9% to $2.5 billion, while overseas net revenue fell 31.4% to $451 million.

Shah said Wayfair is focused on returning to profitability based on adjusted earnings before interest, taxes, depreciation and amortization.

Wayfair shares are down 64% since the start of the year.

Find Wayfair’s full quarterly financial report here.