Wayfair's first quarter revenue jumped nearly 20% as customers used the online furniture retailer to equip home offices and buy home goods amid the COVID-19 pandemic.
While Amazon was an obvious e-commerce go-to for consumers, Wayfair also signaled that it was performing well. The company's logistic and supply chain held up well as rival brick-and-mortar retailers were shut down.
In the first quarter, Wayfair said revenue was $2.3 billion, up $385.2 million and 19.8% from a year ago. Wayfair reported a first quarter net loss of $285.9 million, or $3.04 a share. The non-GAAP loss for the first quarter was $2.30 a share. Wall Street was looking for a first quarter loss of $2.60 a share on revenue of $2.31 billion.
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The results were in line with what Wayfair projected in April. CEO Niraj Shah said Wayfair implemented new processes to meet demand during the COVID-19 disruption. Wayfair's sites include Wayfair, Joss & Main, AllModern, Birch Lane and Perigold.
Shah said on a conference call with analysts that the company was able to transition to a remote work model seamlessly. Wayfair already had a hybrid call center split between work-from-home and office and fulfillment centers adopted new processes to keep employees healthy in the COVID-19 pandemic.
Starting in mid-March, we saw a pickup in both traffic and conversion, with increasingly strong repeat behavior coupled with an acceleration in new customer orders. This period coincided with customers beginning to shelter in place at home, which led to new needs for essential products like cookware and kitchen appliances, home office products and children's furniture and play items, and also brought to light ongoing renovation and decoration projects that customers are now taking on. 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.
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. As a result, we have seen gross sales momentum build across almost all classes of goods across mobile and desktop platforms and across all regions in the U.S., Canada, the U.K. and Germany.
Shah did note that Wayfair wasn't betting on the current revenue run rates to continue, but there is a change in repeat purchases and a larger customer base.
We can all debate how long the current dynamics will persist. To be clear, we are not orienting internally around these revenue run rates, but this does create a unique opportunity to serve our returning and new customers and to accelerate the shift online in our category. We believe there are clearly definable long-term advantages accruing to Wayfair in this period. It is likely that e-commerce adoption is going to step change across a wide swap of categories. In our case, millions of new customers shopped at Wayfair over the last several weeks.
Shah added that "millions of new shoppers have discovered Wayfair while they shelter in place at home, and we are seeing strong acceleration in new and repeat customer orders across almost all classes of goods and across all regions."
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Wayfair's goal now is to bolster gross margins and move toward profitability.
- Active customers for the direct retail business hit 21.1 million as of March 31.
- Orders per customer was 1.86 for the first quarter.
- Repeat customers placed 69.8% of total orders in the quarter.
- Average order value was $235 in the first quarter, down from $237 a year ago.