Wayfair on Wednesday said it posted its strongest quarterly sales growth since the pandemic as the furniture retailer continued to win back customers and gain market share.
The company said it saw double-digit revenue growth in the US, about $3 billion, an 11.4% increase from the previous year. Still, international net profit for the quarter fell 2.3% year over year to $380 million.
Wayfair shares closed about 11% higher on Wednesday.
The report comes as the housing market remains sluggish. But furniture and home goods retailers has reported consistent growth over the past year. CFO Kate Gulliver told CNBC that Wayfair’s momentum is building because it needs market share.
“We look at the overall consumer in the US in this category, we think it’s about flattish, and let us [market] shows the momentum continues to build,” Gulliver said.
He added that shopper loyalty, new store openings, the company’s luxury furniture business and emphasis on value have allowed Wayfair to win more consumers. Customers also continue to spend, whether on the corporate value side or on the luxury side, he added.
“We’ve been promoting a lot over the last few years, and this year’s promotional activity is very consistent with last year’s,” he said. “This keeps the momentum going with regards to this year’s promotional activities.”
Here’s how the company performed in the third quarter compared to what Wall Street expected, based on a survey of analysts by LSEG:
- Earnings per share: 93 cents adjusted vs 79 cents expected
- result: $3.42 billion vs $3.38 billion expected
For the period ended Sept. 30, Wayfair reported net income of $62 million, or 45 cents per share, compared with a loss of $99 million, or 76 cents per share, a year earlier.
Total revenue grew 9.7% year-on-year, reaching $3.42 billion.
The company said active customers grew 4.7% year over year, to 22.2 million. It also saw a 12.2% increase in orders shipped during the quarter to around 11 million.
As the company looks ahead to the holiday season and the fourth quarter, Gulliver said it is maintaining the same promotional activities as last year. He added that Wayfair is confident that its wide range of prices and products will appeal to consumers.
“We’ve seen that growth,” Gulliver said. “We have seen that it flows through to EBITDA, ultimately to a positive net income this quarter, which is really another key piece in the story and momentum here, so we feel very good about the quarter’s performance.”