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BOSTON — Continued improvements in performance, including achieving positive adjusted EBITDA as previously predicted, was one of the highlights for Wayfair’s second quarter earnings.
The online retailer saw total net revenue drop by $113 million to $3.2 billion — a 3.4% year-over-year decrease — although U.S. net revenue fell by just 0.4%, ending up at $2.8 billion for the quarter. International net revenue was down 20.9% year over year, coming in at $386 million for the quarter.
Wayfair reported a diluted loss of 41 cents per share and adjusted diluted earnings per share of 21 cents.
Adjusted EBITDA was $128 million for the quarter and $114 million for the six months ended June 30. Non-GAAP free cash flow was $128 million for the second quarter.
“Last year we laid out a plan to strengthen our business that included a path to sustainable and growing profitability with several key milestones,” said Niraj Shah, CEO, co-founder and co-chairman of Wayfair. “For the past few quarters, you’ve seen us execute against that plan to lower costs, focus on the basics and earn more customer and supplier loyalty. And you’ve seen the tangible impact of this plan as our performance has continued to improve.
“I’m pleased to share today that we’ve passed one of our key milestones, and we are reporting positive adjusted EBITDA and positive free cash flow. This is in combination with a return to momentum in our top line with positive year-over-year order growth and sequentially higher active customer count,” said Shah. “We think we are now in a very exciting place — having scale while remaining ambitious and entrepreneurial — and we plan to take full advantage of this.”
Orders delivered in the second quarter were 10.3 million, up 1.5% year-over-year. Repeat customers placed 80.1% of total delivered orders for the quarter vs. 78.6% in the prior year’s quarter. Average order value fell year-over-year to $307 from $330.
In the earnings calls, Shah pointed to two key drivers for the quarter: share capture and cost efficiency. Wayfair, he said, has been outperforming the category. He said during the recent Las Vegas Market he heard from suppliers that, although demand is weak, “we are a standout in taking share.”
On the topic of cost efficiency, Shah noted gross margin has exceeded 30%, which is a reflection of the company’s ongoing cost-saving initiatives.
