W - Wayfair's Cost Cuts Pay Off but Real Profits Remain Elusive
2023-08-04 06:40:00 ET
Online furniture and home-goods retailer Wayfair (NYSE: W) was slammed by a post-pandemic slowdown in demand. Revenue sank nearly 11% in 2022, along with a steeper decline in active customers. The first quarter of 2023 wasn't much better, with every important metric still in decline.
Wayfair made important progress in the second quarter, particularly on the cost-cutting front. While revenue still slipped and active customers still declined, the company successfully boosted its gross margin and reduced operating costs. The company is still not profitable on a GAAP basis , but it did produce positive adjusted earnings before interest, taxes, depreciation, and amortization, or EBITDA , and free cash flow.
Wayfair generated $3.2 billion in revenue in the second quarter, down 3.4% year over year. The number of active customers sank 7.6% to 21.8 million, although the customer count was up slightly from the first quarter.
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Wayfair's Cost Cuts Pay Off, but Real Profits Remain Elusive