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Wayfair Is Being Hurt By Higher Costs, Slowing Customer Spends

Wayfair (NYSE: W), a U.S. based e-commerce company that specializes in furniture and home goods, saw its stock price decline by close to 30% over the last week, following its weaker than expected Q3 earnings and lackluster forecast for the holiday quarter. While the company’s revenues were stronger than expected, its costs have been mounting, leading to a wider than expected loss (reported loss per share of -$2.23, versus consensus estimate of -$2.10). Although this is partly due to the tariffs following the U.S-China trade war, which raised prices for the company’s merchandise, customer acquisition costs also appear to be on the rise. This is likely to be concerning for investors, as per-customer spending has remained sluggish (orders per customer were flat YoY), meaning that the company may have to rely on increasingly expensive new customer additions to drive growth. Below, we take a look at how Wayfair has fared in recent years and what to expect from the company over the next year.

View our interactive dashboard analysis on How Higher Costs And Slowing Customer Spends Are Hurting Wayfair

How does Wayfair’s Revenue Growth In 2018 compare with that in prior periods and what’s the forecast?

Total Revenues for Wayfair substantially increased from $4.72 Bil in 2017 to $6.78 Bil in 2018; an increase of 43.6%.

This compares with Total Revenues growth of:

  • 70.6% in 2015
  • 50.2% in 2016
  • 39.7% in 2017

We expect Total Revenues growth to be 33% in 2019.

How does Wayfair’s Total Expense in 2018 compare with that in prior periods and what’s the forecast?

Total Expense for Wayfair substantially increased from $4.97 Bil in 2017 to $7.28 Bil in 2018; an increase of 46.7%.

This compares with Total Expense growth of:

  • 58.7% in 2015
  • 53.6% in 2016
  • 38.9% in 2017

We expect Total Expense growth to be 32.5% in 2019.

How does Wayfair’s EBT in 2018 compare with that in prior periods and what’s the forecast?

EBT for Wayfair decreased dramatically by 106% from -$244 Mil in 2017 to -$502 Mil in 2018.

We expect EBT to decrease 29.5% to -$650 Mil in 2019.

How do Wayfair’s Net Income and EPS in 2018 compare with that in prior periods and what’s the forecast?

For more information on Wayfair’s Net Income and EPS, view our interactive dashboard analysis.

 

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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