Wayfair W reported first-quarter 2025 non-GAAP earnings of 10 cents per share, in contrast to the Zacks Consensus Estimate of a loss of 18 cents. The company had incurred a loss of 32 cents per share in the year-ago quarter.

Net revenues of $2.7 billion beat the consensus mark by 0.7%. The top line increased a mere $1 million year over year, driven by a healthy performance in the U.S. segment.

Last Twelve Months (LTM) net revenues per active customer increased 4.7% year over year to $562, which beat the Zacks Consensus Estimate by 7.68%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Further, the active customer base declined. The metric decreased 5.4% year over year to 21.1 million and missed the consensus mark by 5.8%.

Wayfair’s Q1 in Details

Net revenues in the United States (88.9% of total net revenues) increased 1.6% year over year to $2.4 billion. The figure beat the Zacks Consensus Estimate by 1.55%.

International net revenues (11.1% of total net revenues) decreased 10.9% year over year to $301 million. The number missed the consensus mark by 2.77%.

Orders per customer for the quarter were 1.85, up from 1.84 reported in the year-ago quarter. The figure beat the Zacks Consensus Estimate by 3.35%.

The average order value increased from $285 to $301 year over year, beating the consensus mark by 4.89%.

The total number of delivered orders in the reported quarter was 9.1 million, which decreased 5.2% year over year.

Repeat customers placed 7.3 million orders (80.5% of total orders delivered) in the first quarter, down 5.2% year over year.

Additionally, 63.4% of total delivered orders were placed through mobile devices in the reported quarter compared with 63.1% in the year-ago quarter.

Operating Results of Wayfair

Wayfair’s first-quarter gross margin was 30.7% compared with 30% in the year-ago quarter. This was driven primarily due to company’s proactive reinvestments.

Adjusted EBITDA was $106 million, up from $75 million in the year-ago quarter.

Customer service and merchant fees decreased 8.5% year over year to $107 million.

Advertising expenses increased 6.2% year over year to $344 million. Selling, operations, technology and general and administrative expenses decreased 19.7% year over year to $429 million.

Wayfair incurred a GAAP operating loss of $122 million in the reported quarter compared with an operating loss of $235 million in the year-ago quarter.

Balance Sheet & Cash Flow of Wayfair

As of March 31, 2025, cash, cash equivalents and short-term investments were $1.4 billion, which remained unchanged as of Dec. 31, 2024.

Long-term debt, as of March 31, 2024, was $3 billion compared with $2.882 billion on Dec. 31, 2024.

In the first quarter, net cash used in operations amounted to $96 million compared with $162 million cash from operations in the fourth quarter.

Wayfair reported a free cash flow of negative $138 million in the first quarter.

Q2 2025 Guidance

Wayfair expects revenues to remain flat year-over-year.

By the end of second-quarter 2025, Wayfair expects gross margin to be in the range of 30-31% and adjusted EBITDA in the range of 4-5%.

Zacks Rank & Stocks to Consider

Currently, Wayfair carries a Zacks Rank #3 (Hold).

Carvana CVNA, Alibaba BABA and On Holding ONON are some better-ranked stocks that investors can consider in the broader sector. Each stock presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Carvana shares have surged 23.8% year to date. CVNA is set to report its first-quarter 2025 results on May 7.

Alibaba shares are up 42.2% year to date. BABA is slated to report its first-quarter 2025 results on May 15.

On Holding shares have plunged 12.9% year to date. ONON is scheduled to report its fourth-quarter fiscal 2025 results on May 13.

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