Boston — Wayfair’s second quarter earnings demonstrated cautious consumer spending, as the company’s overall net revenue decreased 1.7% to $3.1 billion and its U.S. net revenue decreased by 2% to $2.7 billion.
For the quarter that ended on June 30, the mostly online retailer of home goods did witness an increase in active customers, reaching 22 million, a 0.9% year-over-year increase. Orders placed by repeat customers increased as well, rising to 81.7% from 80.1% in the same quarter in 2023. Additionally, orders per client increased slightly, from 1.82 to 1.85 in the previous year.
The CEO, co-founder, and co-chairman Niraj Shah stated, “Q2 was a dynamic quarter that resulted in a period of share gain, amid continued macro headwinds that are pressuring the ways customers are shopping the category.” “Our credit card data indicates that the category correction now resembles the size of the peak to trough decline the home furnishing space experienced during the Great Financial Crisis, and customers are still cautious with their spending on the home.”
The company recorded its greatest quarter for adjusted EBITDA and free cash flow in the previous three years, Shah said, “clear evidence of our strict operating discipline” despite the uncertain state of the economy. Even if the top line is still difficult, our goal for the firm is to show significant growth in profitability this year.
Non-GAAP free cash flow was $183 million for the quarter compared to $128 million in Q2 2023, and non-GAAP adjusted EBITDA was $163 million.
The company’s foreign revenue climbed by $1 million to $387 million, representing a 0.3% annual growth. $941 million, or around 30% of the entire net revenue, was the gross profit.In guidance for the third quarter, Kate Gulliver, chief financial officer and chief administrative officer, said during the company’s earnings call that Wayfair expects sales to be down in the low single digits, which fits with historical expectations, and gross margin to be at the low end of the 30% to 31% range.
