Wayfair on Wednesday reported its first quarter direct retail net revenue, consisting of sales generated primarily through its sites — Wayfair, Joss & Main, AllModern, Birch Lane and Perigold — rose 47.7% or $448.5 million to $1.4 billion. Gross profit in the quarter was $323.8 million, or 23.1% of total revenue, but its GAAP net loss widened to $107.8 million from $56.5 million a year ago, according to a company press release.
The number of active customers in the quarter rose 33.2% from the year-ago period to 11.8 million as of March 31, and net revenue in the last 12 months per active customer rose 9.6% to $432 as of that day. Orders per customer increased slightly, as well, to 1.79 for the quarter from 1.73 last year. Repeat customers placed 3.8 million orders in the first quarter, a year-over-year increase of 48.9%, and was 64.3% of total orders in the quarter, compared to 60.4% a year ago. Average order value rose to $236 from $223 in the year-ago quarter.
The online furniture and home goods retailer hosted its first "Way Day" sale on April 25, when sales quadrupled compared to an average day in March, according to data from e-commerce purchase analytics firm Edison Trends emailed to Retail Dive. The number of unique buyers on Way Day also rose nearly 400% compared to the March average, although the average order price spent on Way Day ($276) was about the same as in March ($275), according to that report.
Wayfair edged out analysts' expectations for revenue, which at FactSet came to $1.36 billion, as cited by MarketWatch, but shares slipped more than 4% on the e-retailer’s profit miss. Co-founder and CEO Niraj Shah emphasized on a conference call with analysts that the company is looking for growth overseas and said that sales in Canada, U.K. and Germany are gaining traction.
The company remains in customer acquisition mode and its one-day "Way Day" sales event last month could move that along, considering the four-fold increase in unique visitors to the site that day. Beginning at midnight, for 24 hours, Wayfair on April 25 offered blockbuster deals and Black Friday-level prices on some 70,000 home furnishings, décor and home improvement items.
"Retail holidays have traditionally been anchored to public holidays," Shah said, noting that before e-commerce, people needed days off to shop. "With e-commerce ... the importance of public holidays in retail have been reduced. [We] took advantage of a time of year when decorating homes is top of mind."
While executives on a conference call Wednesday declared "Way Day" a success they said will only grow in future iterations, they couldn't say whether customers simply took advantage of the sale to do shopping that had been intended, simply displacing sales from another day. But they also emphasized the company is being careful that pricing, advertising and other investments stoke solid growth that won't dissipate.
"When we invest in pricing, it’s diligent and deliberate," Shah said, adding he's not sure everyone appreciates that the company is being pragmatic in its growth strategy — aiming for a sustainable growth rate, rather than a fast-burning one. "We're very very quantitative in how we protect unit economics. ... We’re selling at a price that one day we don’t need to raise."
Similarly, he said, when it comes to advertising, there is "really tight payback, we get paid very quickly."
These are investments in the "fundamental underpinnings of the experience," one that he called a "very differentiated experience, and customers are loving it. ... We’re in a world of opportunity."