Wayfair W reported a fourth-quarter 2024 non-GAAP loss of 25 cents per share, missing the Zacks Consensus Estimate for earnings of 2 cents per share. The company reported a loss of 11 cents per share in the year-ago quarter.

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Net revenues of $3.12 billion beat the consensus mark by 1.73%. The top line increased 0.2% year over year, driven by a healthy performance in the U.S. segment.

Last Twelve Months (LTM) net revenues per active customer increased 3.4% year over year to $555, which beat the Zacks Consensus Estimate by 5.87%.

Further, the active customer base declined. The metric decreased 4.5% year over year to 21.4 million and missed the consensus mark by 3.85%.

Wayfair’s Q4 in Details

Net revenues in the United States (87.8% of total net revenues) decreased 1.1% year over year to $2.74 billion. The figure beat the Zacks Consensus Estimate by 3.22%.

International net revenues (12.2% of total net revenues) decreased 5.7% year over year to $381 million. The number missed the consensus mark by 5.40%.

Orders per customer for the quarter were 1.85, up from 1.84 reported in the year-ago quarter. The figure beat the Zacks Consensus Estimate by 1.43%.

The average order value increased from $276 to $290 year over year, beating the consensus mark by 2.16%.

The total number of delivered orders in the reported quarter was 10.7 million, which decreased 5.3% year over year.

Repeat customers placed 8.5 million orders (79.4% of total orders delivered) in the fourth quarter, down 5.6% year over year.

Additionally, 64.5% of total delivered orders were placed through mobile devices in the reported quarter compared with 62.8% in the year-ago quarter.

Operating Results of Wayfair

Wayfair’s fourth-quarter gross margin was 30.2% compared with 30.3% in the year-ago quarter. This was driven by some deleverage on contracting orders and the company’s own proactive reinvestments.

Adjusted EBITDA was $96 million, up from $92 million in the year-ago quarter.

Customer service and merchant fees decreased 13% year over year to $120 million.

Advertising expenses increased 12.6% year over year to $429 million. Selling, operations, technology and general and administrative expenses decreased 20.6% year over year to $474 million.

Wayfair incurred a GAAP operating loss of $117 million in the reported quarter compared with an operating loss of $172 million in the year-ago quarter.

Balance Sheet & Cash Flow of Wayfair

As of Dec. 31, 2024, cash, cash equivalents and short-term investments were $1.4 billion, up from $1.3 billion reported on Sept. 30, 2024.

Long-term debt, as of Dec. 31, 2024, was $2.882 billion compared with $3.061 billion on Sept. 30, 2024.

In the fourth quarter, cash from operations amounted to $162 million compared with $49 million used in operations in the third quarter.

Wayfair reported a free cash flow of $102 million in the fourth quarter.

Q1 2025 Guidance

By the end of Q1 2025, Wayfair expects revenues to either remain the same or decline compared to the previous year. This forecast also factors in a negative impact of about 100 basis points due to the company's exit from the German business.

Gross margin is expected to be in the range of 30-31% and adjusted EBITDA in the range of 2-4%.

Zacks Rank and Other Stocks to Consider

Currently, Etsy carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader sector are Bath and Body Works BBWI, Sweetgreen SG and Cars.com CARS, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Bath and Body Works and Cars.com are scheduled to report their respective fourth-quarter 2024 results on Feb. 27. Sweetgreen is slated to report its fourth-quarter 2024 results on Feb. 26.

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