After Q3 Beat, Wayfair CEO Says E-Commerce Site Poised For Growth Beyond Pandemic

Wayfair reported a strong year-over-year revenue increase Tuesday for the third quarter.
The e-commerce website's revenue and growth slowed sequentially from the second quarter, but the repeat customer metrics show possible long-term strength.

What Happened: Wayfair Inc W reported third-quarter revenue of $3.8 billion, up 66.5% year-over-year.

Wayfair ended the third quarter with 28.8 million active customers, up 51% year-over-year.

Orders per customer improved from 1.85 to 1.94 year-over-year. 

Related Link: Tony Zhang’s Wayfair Options Trade

Why It’s Important: Wayfair said it notched 11.3 million orders from repeat customers in the third quarter. This figure grew 84.4% year-over-year.

Repeat customers made up 71.9% of third-quarter revenue, compared to 67.3% in the third quarter of the last fiscal year.

Those figures could be important going forward as Wayfair moves beyond a pandemic play and work-from-home stock.

In the second quarter, Wayfair reported higher revenue of $4.3 billion and higher revenue growth of 84% year-over-year.

The second quarter saw repeat customers make up 67.4% of total revenue.

“While today’s unique environment has accentuated these trends, we are confident there is a long runway for continued strong profitable growth ahead for Wayfair — well beyond when the current circumstances have passed," CEO Niraj Shah said in a statement. 

W Price Action: Wayfair shares were trading 3.57% higher to $265 at last check Tuesday. 

Benzinga’s Take: The pandemic and a shift to work from home has led new customers to e-commerce companies like Wayfair.

These companies are hoping to capture long-term gains by winning them as future customers.

The strength in Wayfair’s repeat customer business in the third quarter could be a positive sign for future earnings.