The stay-at-home trend has affected retailers in all sorts of ways, but that's especially true of online home goods retailer Wayfair. Prior to the pandemic, Wayfair was gaining market share, and losing lots of money in the process, to build a multi-billion digital home business. Now the company is gaining share at an accelerated rate and actually making a profit.
Wayfair’s total sales increased 66.5% to $3.5 billion and its active customer count increased 51% to nearly 29 million, during the period ended Sept. 30. In addition to drivers of demand related to the at home trend, the quarter also benefited from inclusion of a two-day promotional event called Way Day that began Sept. 23 ahead of Amazon's Prime Day event held Oct. 13-14.
“In the midst of continued uncertainty about the economy and the pandemic, Wayfair delivered another quarter of strong operating and financial results in Q3,” said Niraj Shah, CEO, co-founder and co-chairman of Wayfair. “Category momentum is vibrant, demand is moving online at an accelerated pace, and we expect the home to be even more important than usual when it comes to celebrating the holidays this year.”
Shah maintains that the company’s long-term mindset and strategic investments in merchandising, selection, service and delivery in North America and in Europe are translating to share gains, sustained profitability, and positive free cash flow generation. He also gave a nod to the impact of the pandemic.
“While today’s unique environment has accentuated these trends, we are confident that there is a long runway for continued strong profitable growth ahead for Wayfair, well beyond when the current circumstances have passed,” Shah said.
The third quarter figures show impressive growth, they are actually a deceleration from the second quarter when the full force of the pandemic first became evident. Sales during the period ended June 30 increased 84% to $4.3 billion and active customers increased 46% to 26 million.
In addition to driving top line growth and bring new customers into the Wayfair fold, the company reported a third quarter profit of $173 million after it reported net income of $274 million in the second quarter. Wayfair reported a loss of $285 million during the first quarter after it lost nearly $1 billion in 2019 on revenues of $9.1 billion.