Wayfair stock is down 20% in premarket today: how come?

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Shares of Wayfair Inc (NYSE: W) were down nearly 20% in premarket trading after the eCommerce home retailer said it lost more money in the fiscal fourth quarter than what the Wall Street had expected.

Notable figures in the Q4 report

Net loss in Q4 printed at $202 million that translates to $1.92 per share.
In the same quarter last year, Wayfair had posted $24 million in net income or 23 cents a share.
On an adjusted basis, the U.S. firm lost 92 cents per share.
At $3.252, quarterly revenue noted a year-over-year decline of roughly 11%.
U.S. revenue was down 8.8% and international 23%.
FactSet consensus was for 70 cents of adjusted per-share loss on $3.282 billion in revenue.

Wayfair was pretty much in freefall last year, with the stock now down about 70% since April 2021. It trades at a PE multiple of 141 at present. The company announced key executive hires a week ago.

CEO Shah’s comments

In the recent quarter, Wayfair noted a 12.5% annualised decline in active customers to 27.3 million, but average order value jumped 21% YoY. In the earnings press release, CEO Niraj Shah said:

While consumer behaviour has changed repeatedly throughout the pandemic, the primary elements for success in our category have not. Secular trends favour a long and durable shift to eCommerce. Wayfair has only just begun to scratch the surface of this vast opportunity.

Revenue for fiscal 2021 as a whole was down 3.1%. The Boston-based company ended the year with $2.40 billion in cash, cash equivalents and short-term investments. The chief executive added:

In the last two years, we’ve grown our topline by over 50% without increasing headcount, which demonstrates scalability and attractive structural economics of our business. We’re continuing our high ROI initiatives and are ready to navigate the macro environment with a strong balance sheet.

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