Ecommerce home furnishings giant Wayfair increased its fourth quarter sales 40.6% to $1.99 billion, but saw its Q4 net loss balloon to $143.8 million, nearly doubling the $72.8 million loss from the same period in 2017.
For the year, Wayfair grew its revenue 44% or $2.1 billion to $6.8 billion but posted a net loss of $504.1 million, more than double the $244.6 million figure on the bottom line in 2017. But the company accentuated the positive on its Q4 earnings call, touting its net revenue growth and holiday performance.
“In the fourth quarter of 2018 we added $577 million in direct retail net revenue year-over year, representing the largest dollar growth in a single quarter of the company’s history,” Wayfair Co-Founder, CEO and Co-Chairman Niraj Shah told analysts.
Shah said sales growth was driven by the strength of offerings, with more than 15 million active customers at the end of 2018 exceeding 15 million. He added Wayfair had a successful holiday season, especially Cyber Weekend, with direct retail gross sales up 58% in Q4.
“Black Friday, traditionally more of a brick-and-mortar sales event for shoppers, grew more quickly than the other four days of the period than in 2017,” Shah said.
Shah said Wayfair ran discounts on over twice as many products in 2018 as in 2017, due to improved supplier planning.
“Over Q4 as a whole, we ran 20 promotional holiday campaigns, leveraging a wider set of new and differentiated offers to maintain high engagement throughout the period, including gift card incentives, free shipping and flash deals,” he said.
Shah said flash deals were successful during its created Way Day shopping holiday in April 2018, as well as over Cyber Weekend. Wayfair has also successfully leveraged its collection of over 80 house brands, increasing net revenue on these products by 74% in 2018.
Average order value was $227 in Q4, lower than in the third quarter but consistent with the seasonal trend of lower-ticket holiday items.
“Order from repeat customers in Q4 grew 51% year-over-year, approximately twice the rate of orders from new customers, continuing the strength we saw throughout 2018,” said Julia Donnelly, Head of Corporate Finance for Wayfair.
In the U.S., Wayfair’s direct retail net revenue, consisting mostly of sales on its five ecommerce sites, increased 39% or $481 million to $1.7 billion in Q4. Its international businesses in Canada, the UK and Germany collectively increased direct retail net revenue to $287 million, up 50% in the quarter.