As temporary store closures due to the COVID-19 outbreak shook up physical retail, Wayfair’s U.S. sales skyrocketed 19% in its first quarter 2020.
“Millions of new customers shopped at Wayfair over the last several weeks,” Niraj Shah, CEO, co-founder and co-chairman, Wayfair, said during the company’s earnings call.
The home goods and furnishings retailer said it saw a pickup in both traffic and conversion starting in mid-March as customers began to shelter in place at home.
“The competitive landscape also shifted as many physical retail stores closed temporarily, leading customers to move increasingly towards shopping online across all categories, including home,” said Shah. “This pickup in demand has continued to gain momentum. And in the U.S., the rollout of stimulus monies in mid-April served as an added accelerant of new and repeat customers coming to Wayfair.”
Wayfair shoppers bought products like cookware, kitchen appliances, home office products and children’s furniture and play items.
However, despite the uptick in e-commerce shopping, Wayfair posted a net loss of $285.87 million, or $3.04 a share, for the quarter ended March 31, compared with a net loss of $200.39 million, or $2.20 per share, in the year-ago period. Excluding one-time items, Wayfair lost $2.30 per share. Analysts expected an adjusted loss of $2.60 per share. Net revenue grew nearly 19.8% to $2.33 billion, topping estimates of $2.31 billion.
“As we execute on the plans we set in motion late last year, we are making significant strides toward profitability by driving gross margin expansion, increasing marketing efficiencies, and gaining leverage on operating expenses,” Shah said in a press release. “Our solid internal progress and healthy balance sheet put us in a position of strength in a highly dynamic environment.”
Wayfair reported the number of active customers in its Direct Retail business jumped 28% year-over-year to reach 21.1 million as of March 31, and 9.9 million orders were delivered in the quarter.
Repeat customers placed 6.9 million orders (69% of total orders) in the first quarter of 2020, a 27% spike year-over-year.
“We’re seeing proof of these customers’ positive experiences in strong NPS scores and repeat purchasing behavior from new customers that is consistent with or better than previous customer cohorts,” said Shah.
“Time will tell how economic conditions affect future purchasing behavior and the size of the overall home market, but there is little doubt that the quality of experience we can offer to new and returning customers during this challenging time will serve us well in the future.”