Wayfair on Thursday announced third quarter direct retail net revenue, which includes sales from the company's sites, increased 35.9%, or $607.2 million, to $2.3 billion.
The online home goods retailer's net loss grew nearly 80% from last year to $272 million, according to a company press release. Wayfair reported negative adjusted EBITDA of $144.2 million, or 6.3% of total net revenue.
Wayfair also reported that the active customers in its direct retail business increased 37.6% to $19.1 million. Wayfair's mobile business continues to grow, with the company reporting 53.5% of total orders were placed via mobile devices up from 49.2% in the year-ago period.
While revenue performance beat the FactSet Consensus of $2.28 billion, the wider than anticipated net loss drove Wayfair stock down some 6% in premarket trading. The company also posted "disappointing revenue guidance of $2.23-$2.28 billion for Q3, which is a decline from Q2's $2.34 billion," according to a Jane Hali and Associates client note emailed to Retail Dive.
And though its customer base is growing with repeat customer purchases accounting for 67.3% of total purchases, the company can't seem to eke out a profit. Since going public in 2014, Wayfair has failed to become profitable, with losses continuing to grow quarter after quarter.
Still, CEO Niraj Shah remained "confident in the future growth of the business" directing attention away from the mounting loss in the quarter and towards Q4.
"We are excited for the upcoming holiday season, and expect to continue to disrupt the current retail landscape through innovative solutions to traditional customer pain points as we solidify Wayfair's position as the best place to shop across all home-related categories," Shah said in a statement.
Jane Hali and Associates noted that the company "is dealing with a low-margin furniture segment with high logistics and transportation costs," though the company said on Thursday that it will continue to build out its own logistics network.
That move, however, may end up hurting the retailer's Q4 results, according to William Blair analysts led by Dylan Carden. "As the company continues to invest in proprietary fulfillment capabilities, we see risk of downside to initial fourth-quarter margin estimates of -3% into the guide."
The company in the third quarter opened its first permanent location at the Natick Mall in Natick, Massachusetts, in addition to several pop-up shops. Wayfair also hosted a sales holiday dubbed "Black Friday in July" in an effort to compete with Amazon's annual July Prime Day, causing Wayfair to slash prices on "nearly every category through July 23," Jane Hali and Associates said.