Shares of the online home furnishing retailer, Wayfair, experienced a dip on Friday amidst a decrease in customers, even though adjusted profits significantly exceeded analysts' predictions. In its third-quarter reports, Wayfair posted an adjusted earnings per share (EPS) of $0.22, almost twice the forecast presented by analysts at Visible Alpha.
However, the retailer saw a 2% fall in year-over-year revenue to $2.88 billion, a figure which still met expectations. Similarly, the adjusted EBITDA margin was reported at 4%. The company saw a drop in active customers by 3%, settling at 21.7 million, with delivered orders also falling by 6% to 9.3 million. Repeat customers placed 7.4 million orders, marking a 6% decline.
On a brighter note, the last 12 months saw revenue per customer increase slightly by 1% to $545. Moreover, the average order value observed an increment of $13, totaling $310. The company managed to reduce its operating costs by a commendable 11%, bringing them down to $947 million.
Niraj Shah, the Co-founder and Chief Executive Officer (CEO) of Wayfair, justified the slide in customers, stating that the company managed to increase its market share amidst continuous struggles in the category. Shah also noted that “Wayfair navigated a dynamic consumer environment while driving further discipline on costs to achieve a mid-single-digit Adjusted EBITDA margin for the second quarter in a row."
Following the announcement of these results, shares of Wayfair, which had initially risen in premarket trading, were seen to decline by 1% in recent trading. Notably, the shares have lost a third of their value this year.