In This Article:
A month has gone by since the last earnings report for Wayfair Inc. W. Shares have lost about 6.3% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is W due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Wayfair (W) Bottom Line Miss Estimates in Q4; Revenues Beat
Wayfair Inc. (W) reported adjusted fourth-quarter 2017 loss of 58 cents per share, greater than the Zacks Consensus Estimate loss of 51 cents.
Higher-than-expected operating expenses impacted the company’s bottom line.
Revenues
Wayfair reported total net revenues of $1.44 billion in the fourth quarter, reflecting an increase of 21% sequentially and 46% year over year. The increase was driven by strength in both the U.S. and international segments.
However, revenues exceeded the Zacks Consensus Estimate of $1.34 billion.
Important Metrics
Direct Retail net revenue, which includes sales generated primarily through Wayfair’s sites, were $4.6 billion in the fourth quarter, increasing 48% year over year.
Active Customers increased 33.2% to 11 million. Also, LTM net revenues per active customer increased 6.8% to $422 million.
Orders delivered in the quarter were 1.77 million, reflecting an increase of 4% from the year-ago quarter.
Repeat customers placed 62.4% of total fourth quarter orders compared with 58% in the year-ago quarter. They placed 3.9 million orders in the fourth quarter, up 41.3% year over year.
Operating Results
Gross margin was 23.1%, down 110 bps year over year.
Wayfair’s operating expenses of $399.9 million increased 41.6% year over year. The operating margin was (4.7%) compared with (4.4%) in the year ago-quarter.
Balance Sheet & Cash Flow
Wayfair exited the quarter with cash, cash equivalents and short-term investments of roughly $620.0 million, up from $610.4 million in the prior quarter. Accounts receivables were $37.9 million, up from $27.5 million in the last quarter.
Cash flow from operations was $36.9 million in the fourth quarter. The company spent $23.9 million on capex and $11.5 million on site and software development. Free cash flow was $1.4 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There have been seven revisions lower for the current quarter.
Wayfair Inc. Price and Consensus
Wayfair Inc. Price and Consensus | Wayfair Inc. Quote