Wayfair (W) 3Q16 Results: Despite Solid Quarter, Softer Consumer Spending Has Sales Outlook Below Expectations

Executive Summary

• Boston-based online home goods retailer Wayfair reported adjusted 3Q16 EPS of $(0.54), ahead of the $(0.59) consensus estimate, but down from $(0.13) in the year-ago period. Revenues were $861.5 million, up 45.0% year over year and above the consensus estimate of $845.9 million.
• Orders in 3Q16 totaled 3.4 million, above the consensus estimate of 3.2 million. Average order value was $244, compared with $235 in the year-ago period. Ending active customers totaled 7.4 million, up 60% year over year and versus consensus of 7.3 million. Mobile orders accounted for 40.3% of the total, up from 35.1% in the year-ago quarter.
• For 4Q16, Wayfair expects revenue of $920–$960 million, below the $1.03 billion consensus estimate. Additionally, the company expects direct retail revenue in the range of $890–$925 million, below the $995 million consensus estimate.