Wayfair (W) Misses Q3 EPS by 19c, Revenues Beat

Wayfair (NYSE: W) reported Q3 EPS of ($1.28), $0.19 worse than the analyst estimate of ($1.09). Revenue for the quarter came in at $1.71 billion versus the consensus estimate of $1.67 billion.

Third Quarter 2018 Financial Highlights

• Direct Retail net revenue, consisting of sales generated primarily through Wayfair’s sites, increased $511.2 million to $1.7 billion, up 43.3% year over year
• Gross profit was $392.8 million or 23.0% of total net revenue
• GAAP net loss was $151.7 million
• Adjusted EBITDA was $(76.4) million or (4.5)% of total net revenue
• GAAP basic and diluted net loss per share was $1.69
• Non-GAAP diluted net loss per share was $1.28
• Non-GAAP free cash flow was $(58.8) million
• At the end of the third quarter, cash, cash equivalents, and short-term and long-term investments totaled $525.2 million

"We are pleased to report another quarter of incredibly strong growth with our Direct Retail business growing 43 percent this past quarter," said Niraj Shah, CEO, co-founder and co-chairman, Wayfair. "We are delighted with the market share we are winning as we continue to invest in leading the way in bringing customers the best possible shopping experience in our category online. Our customers are responding extremely well to our offering in the U.S. and internationally, with our customer KPIs continuing to strengthen. We are taking a long-term approach to building our business and putting shoppers first by investing further in our logistics capabilities, in our international regions and in scaling headcount to enhance our customer offering in under-penetrated product categories and services. Overall, we are thrilled with how the business performed in Q3 and are excited to build on this strength moving forward."

Other Third Quarter Highlights

• The number of active customers in our Direct Retail business reached 13.9 million as of September 30, 2018, an increase of 35.2% year over year
• LTM net revenue per active customer was $443 as of September 30, 2018, an increase of 8.6% year over year
• Orders per customer, measured as LTM orders divided by active customers, was 1.84 for the third quarter of 2018, compared to 1.75 for the third quarter of 2017
• Repeat customers placed 66.3% of total orders in the third quarter of 2018, compared to 61.0% in the third quarter of 2017
• Repeat customers placed 4.6 million orders in the third quarter of 2018, an increase of 59.7% year over year
• Orders delivered in the third quarter of 2018 were 6.9 million, an increase of 47.0% year over year
• Average order value was $244 for the third quarter of 2018, compared to $250 in the third quarter of 2017
• In the third quarter of 2018, 49.4% of total orders delivered for our Direct Retail business were placed via a mobile device, compared to 45.4% in the third quarter of 2017

For earnings history and earnings-related data on Wayfair (W) click here.

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