Wayfair Q3 Sales Jump But Losses Mount

Wayfair’s sales surged in the third quarter, but the retailer’s losses mounted due to operating expenses.

In the third quarter ended September 30, Wayfair recorded a net loss of $60.9 million, or 72 cents per share, versus a net loss of $15.5 million, or 18 cent per share, in the period a year earlier. Adjusted net loss was $45.7 million, or 54 cents per share, versus a net loss of $10.6 million or 13 cents per share, in the 2015 quarter.

Net revenue was $861.5 million versus $594 million, in the fiscal year prior. Direct retail revenue, consisting of sales generated primarily through the Wayfair’s five branded websites, came in up 52.7%, reaching $832.4 million.

Corporate operating expenses soared to $263.3 million from $160 million in the quarter the year previous, with additional spending split between customer service, advertising, merchandising, marketing, sales and operations, technology, general and administrative expenses.

Average order value was $244 in the quarter, compared to $235 in the 2015 period. Orders delivered in the quarter increased of 47.1% year over year. The number of active customers in Wayfair’s direct retail business reached 7.4 million as of September 30, up 60.4% year over year, while repeat customers placed 56.9% of total orders versus 55.2% in the 2015 third quarter.

“We are very pleased to report yet another strong quarter of rapid growth as we continue to gain significant market share,” said Niraj Shah, Wayfair CEO, co-founder and co-chairman. “Overall, our business grew third quarter net revenue by 45% year over year and our direct retail business was up 53% year over year. With a core focus on enhancing the retail experience for our customers through technology, innovation and inspiring merchandising, we are rapidly redefining the way people shop for their homes. From augmented and virtual reality solutions to a brand new wedding registry experience, we are applying cutting-edge technologies to traditional retail challenges to make our e-commerce experience the preferred way to shop for furniture, décor, home improvement products, seasonal décor and more. At the same time, we are making tremendous strides to further optimize our logistics network and merchandising efforts in ways that directly and uniquely benefit our customer. We are excited to enter the holiday season with our strongest offering ever and remain very enthusiastic about our-long term growth and profit potential.”