Pandemic-fueled categorical demand continued to propel Wayfair into the first quarter of 2021. The online home retailer on Thursday reported net revenues grew 49.2% from last year to reach $3.5 billion.
Wayfair added 2 million customers from the fourth quarter, reaching a total of 33.2 million — a 57% increase from last year, according to a company press release. But its existing customers helped fuel sales growth in Q1: Repeat customers placed 74.5% of total orders, or 10.9 million orders.
The retailer reported net income grew 106.4% to $18.2 million from a loss of $285.9 million in the year-ago period.
For much of the past year, consumers' lives have revolved around the home. Many employees and students shifted to remote work and virtual learning. Instead of dining out at restaurants, many cooked meals at home. Most recreational activities were also limited to people's personal spaces.
Retailers operating in the home segment — from home furnishing to home improvement — saw a boost as consumers invested more into the place they spent the majority of their time in.
For Wayfair — which benefited not only from selling in an in-demand category, but also from selling online, where many consumers shifted their spending — the last year has propelled its growth.
After going public in 2014, the online retailer was finally able to reach profitability in the second quarter of 2020. In each quarter since, Wayfair has remained in the black, posting a net profit of $185 million in 2020, up from what analysts called an "eyewatering" $985 million loss the prior year.
And growth doesn't appear to be slowing: Executives on a call with analysts Thursday said they believe this profitability will continue through every quarter of 2021.
"In general, we expect that as we deliver sequential top-line growth over time, it will translate to growing EBITDA dollars, even as we continue aggressively investing in our future," CFO Michael Fleisher said.
Wayfair this past week hosted its annual Way Day sales event, which will be reflected in the retailer's second quarter. Although CEO Niraj Shah didn't offer many details into how much the event brought in, he did say "the event set a new Way Day record," with demand in outdoor, upholstery and bedroom categories.
As vaccinations have become largely accessible, and the U.S. slowly begins to open up again, questions emerge around whether the pandemic-induced growth in the home sector can be sustained.
But for Wayfair, Shah expects growth will continue post-pandemic due to a number of factors, including flexibility around remote work and the home remaining a key part of consumers' lives.
"While time will tell, some of the early data points we have seen paint a picture that looks very promising for our business over the long term," he said.