Recent W transcripts
Associated W filings
| Joe Wilson | IR Contact |
| Niraj Shah | Co-Founder, Co-Chairman, President & CEO |
| Steven Conine | Co-Founder & Co-Chairman |
| Michael Fleisher | Chief Financial Officer |
| Julia Donnelly | Head of Corporate Finance |
| Peter Keith | Piper Jaffray |
| John Blackledge | Cowen |
| Maria Ripps | Canaccord |
| Brian Nagel | Oppenheimer |
Good morning. My name is Michelle, and I will be your conference operator today. At this time, I would like to welcome everyone to the Wayfair Q3 Earnings Call. [Operator Instructions] I would now like to turn the call over to Mr. Joe Wilson. ahead. go Please
Conine, thank Corporate review and are joining Today, Julia Co-Chairman; us. Shah, Chief Michael Good Officer; Financial third you quarter will and Steve and Officer our Chief Head me and XXXX we Co-Chairman; Co-Founder, Fleisher, of morning Donnelly, Executive for Co-Founder Finance. results. Niraj With
assumptions. this events will be although have been available we will remarks. financial to like our would that guidance all fourth for we and prepared in for future that be that We reasonable quarter We remind forward-looking forward-looking make call performance, including during of accurate, statements I will believe statements and cannot Q&A, following regarding any you the we today's guarantee XXXX. expectations
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me let the before questions. Niraj take your Now, turn to call we over
best about our making people with see the business and U.S. the are brand is deepening and almost them Michael. proposition us possible rewarding their Steve customers our and and investments services We're ability of the we've shopping experience of to excited the our XX,XXX opportunity increasingly progress they I bringing ahead we infrastructure internationally. internationally. in Thanks, our company in capture the the as offer us, logistics the with category we in are in and both delighted and then awareness the making very momentum strengthening online. in home Customers products been benefit from dollars and our
market we improve offline on can on to we can from focused are substantially growth our category. tailwind home operator in to offer now continuing you. in line, category, to the rate open online the that, efforts the long-term, And shoppers the grow Thank that questions. with excess few answer up of the our online ask over so what I'll a of of capitalize All and we so can secular for your the
first Keith question Piper from Jaffray. [Operator comes Peter Instructions] Your from
open. line Your is
for the the growth could bit your continued of into us range Congrats some know, But us quarter, the profitability understand to I came margin below did headcount that in where KPIs. and mentioned guidance above. missed on the revenue despite measures improving -- a total I EBITDA into be. dig EBITDA however. want strong It your Michael, bit for sales you little dig little and you help maybe did a bit? the
question. Niraj. question. it's want I your to to Thanks for we this Peter, with Hi, guess Michael on your one start answer
Peter. hey, Yes,
terms look I spend. mentioned think at two top which key tracked the of to is as EBITDA in both ad areas in well. of I One
And great think, the the and the if We to spend one number it's of we business to year I but quarter. opportunities our as to a trying call, middle make one we advantage opposed year perspective going those and of within -- go even take spend. we've at on ad and it As lean as quarter, on time finding that in said we're that to talked of returns going payback, some expect we a aware opportunities beginning it’s guided. see team we to payback it. the of do of And as customer from always is we're show particular is at to long-term the something continue the last the sort did ad leverage, what's in right quarter's again, through see we went we look on about, everyone, or acquisitions for the new average time
dozens at about So versus QX. to at them basically leverage. as we basis the to is we to And as of even or new the going we've people And ads ago, XX added showing expected. been very think are of in side the our came adding, same we're were can. plan off the employer then revenue to extremely and has And time, of drivers net the incremental the future the of the we're about OpEx excited think, who last we are to I that factors going I But are the team good flat EBITDA against growing call, we sort that were right the two headcount than really as we're you folks in faced We of on ad oppose I key the the strong. we loss. that people on we've performance led starting in sort dozens of that higher growth. It and the are good other team And That how XX that in we in process points middle feel had add about, OpEx, about step spend fourth quarter. extensively brand talked those stronger initiatives we've and year-over-year rate all hiring. think, now down quarter of expense
could any concern Understand questions the a help XX% across marketplace? see supplier discussions you're tariffs increases initial on general you a you of website? aren’t lot I'm price the understand demand on your there inflation is price with investor if tariffs. you your impacted, but on if there's of us if any did starting -- destruction I if for guys what so specifically directly have are the to like curious question getting around some
Yes.
obviously, So assume three the waves, basically XX%, is right. by we
-- we steel The the XX a on has up in that materials. other and that Then effect through the raw effect was turn year. into trickle XX% wave XX XX earlier summer effect materials that the into September, on there this went of some goes have to and then materials at raw first the some is go
they're of And been into suppliers a back is can out we discontinuity, going they all it they what chains, their create what seeing because, of where period obviously, hearing from that supply take have so does really would costs other as advantages effectively we these which love each to us care not to is are raise prices. the dynamic is that with have, for one the And platform competing a take suppliers customer.
has the And don't so to want other to that a basis, position suppliers. on what know even do something though they relative you happened, a in is disadvantage relative put yourself
We how are contain to all trying figure costs. to out our
a we So that versus obviously if hurt. effectively if gives this, benefit against obviously, us, were we things middleman, go a case, which in
kind is the I to terms it to suppliers trying we're all tariffs, materials through that think, way keep then coupled to their going is In amount are happen price they possible. increase of inflation working going how the seeing price to is increases, well out need with much pass take the increases. what think feel what as raw when, they exactly in can and price is what cost is And the be, things as through of that driving reality net I of to
here, -- figure denominated bit on are suppliers And advantage are it where then currency suppliers out you period liking dollars products out do. lot of have kind abrupt coming generally period, fairly think, we I and dramatically dollars. had a where that in And no we the then there to had of significantly to change of mayhem that, definitely to of was material trying hearing the what quicker the tariffs up. go mayhem than So aggressive some you in be the period, have from then there suppliers increases some retails period -- Brexit, FX other absolutely of buying to others, more I or there and found hurts are suppliers because a lose are the a of the price conversations. it sort in and on the denominated the suppliers, you happened with what pound but you case, kind these And notice little notice whereas have a
kind what we now. are seeing of So that’s
from Your comes Cowen. next from question Blackledge John
Your line is open.
then that questions. so 'XX Niraj will Maybe from September. run billion became XQ EBITDA available And products? color on color how and of you sponsored X% products to in X% so I U.S. then, so you frame versus they or U.S. Like sponsored kind Couple experiences ramp on of some the customers margin the it became ROI you And think EBITDA widely might on based bogie? XX% color to number minus revenue Could provide longer-term? Thank full-year beta on EBITDA, mentioned or what of margin? long-term that sponsored your separately impact the could for products, -- biz, X% at annual on $X.X get for in any this minus of XXXX. of long-term how guide, you. kind about any
This is Niraj.
Michael Let chime me in to to can other try maybe answer, has thoughts and if then some -- add. he
the but they're to it get accustomed generally frankly it's need folks First ad kind want on much better the to available, means and to which suppliers who initial enter, for in elsewhere. even compete what so on it's us we can when -- charts, elsewhere, the a return to higher spend high sponsored than than ROAS that made pretty hearing, probably because the be higher lot everyone more for in for doesn't as you been participants because economics we're off the place much it's products, of that it ROAS, we launch since did period the the beta
that thing of seeing use we're if into customer personalization customers the and I about advertising to easy that of a of And good can things return, and do experience basically can has one side. economic help a is be effects. very negative are positive the feel around or have customer can the one things understanding sometimes, the more about you long-term like the need experience conclude they careful we lot the that product. lucrative lot you for highly the make and need makes experience that's on reacting to positively, who're customer suppliers that combination protected reporting, us So very customers and and It's a the that sure great versus, been
So -- a it's spot. in that we're one great
reality, and we long-term, In take your quarter question, think, timing it'll of the terms ramp a in this up. to benefits little as while the
there economics So good think -- it starts grows, everyone the volume for volumes it's we relatively I obviously involved ramps. the and And small. get those it real as but
and I we ramp And are a out plays it stage, but a would I as quarter, start ramp but in is forward, think next so through But that of many a to of -- contributor. thoughts particularly On be year the think, think see give being as contributor. will think, question. quarters. a wouldn’t so we meaningful your it this as not question, your thing quarter you will large I the might sort different EBITDA few I I together answer And a of it important
you X% you if well, tied and how And the at those need are to One billion, it about -- answer think of minus because statements. $X.X you out. the play I'd two you those important kind does at things, to that encourage decouple of really realize it things
the other words, scale doesn't in So unlock high EBITDA. alone
you all at down take be few customer $X.X customers, other ones XX-month at much we do obviously, To We be saying the And cost in instead we new is spend the order basically then would payback. months that wouldn’t could actually do payback worlds, One could target get say would We the could a payback. So we today growth. -- of we it could economics less is ad need the in range. things. we is at target how X be billion. XX-months. Once a range, we today, to of difficult. to lot that X-month want want in new and in look that payback to that a on a of And
You significant of ad spend. portion could take out the
you because advertising can be all X or spend be basically get the accrue that and period. that money, longer of nicely, if payback years active half quite in And smaller. a All But the X ad look spent money growing You you've the my now, the over paybacks. to years, you'd period, you profitability current still customer out running take today. shorter would base is of your dollars
way today's So you but a profit in up. long shoots are run, the just smaller player,
second The OpEx. on is
running always ahead of about think and of long-term doing are costs quite growing yet. the because you we P&L what our that you run aggressive CastleGate facilities, of basically have rents, team, unutilized team after. the utilization today, know facilities expansion and building, what year It's unutilized all quite look as fact higher we're If costs and put lot because we've volume the volume you with your we and look through full at That's rent, leased and through it the it. a going nicely. that because out level the to the we're is in can but it's a just much it expanding like. would today a run next And more we're but but year aggressively put comes for about all the the not not of there through that excited we're also out paying building probability But it despite the the the than at
teams, for other loyalty, about these When super-high all teams. have design category The I about place couple talked the we services, dozen financing. of the these this a different teams, deal. about example, -- these about we talked that's in ROI time talked talked say, talked couple people, some I And OpEx about is the on is thing. people well, Well one and key a that we dozen not you big
Now the things. doing we're these trick is, dozens of
or dozens, and or dozen teams, lot people, costs. times of couple lot a a XX of people these a that's of So XX that's
is one significant, And of these these side are the hiring so, the folks on hand while efforts. been has now ramp plus
away. So pay there's huge again, when everyone gains, right the for you into roll but we future,
why And other do of you could say, thing don't we things? just Let’s just you pick so half the up. do well, those could is
if gains And And the you years what half. get would again in. up. And get EBITDA the the or opportunity, half out, half half the a fruit, categories Pick then what, you of Let's little you know do other you those confident we the you on let's bit other hanging two in pick them. can't low so and three today's do shoot on category pick the would could. half half is or that But side, would are relative one, you -- more the wouldn’t categories only the categories. just get if happen those way
and in P&L, which cost. margin of is bunch international, because is there our on So the bunch suppressed a is a a things of gets effect gross huge things there gross margin because example, for on mix of
the U.S. where that margin things, that are has talking are gross up. mixed You transportation gross expensive about margin low suppress just margin. the there even here new new scaling These we are logistics have within start but categories U.S. in things the that the on gross
led term there. there things did you hey, basically are So but longer. the do categories if take standpoint, less we just would that near there us margin, in margin there are more the gross could rise power And where that’s say, a could frankly, we from buying to
way So decisions today a to orientation thing about just see that profitability. But be just we there there EBITDA about we long the different is if ready answer. to is first the simply what think to kind about make want time
the is view number big do very to be the that Our of we what winner to because we the in space. X% and are large -- number, would like large is XX% the against
of the our get And continue are take built, we of because aggressively experience. we full while because the And margin, we the share so very therefore loyalty. and scaling customer basically getting have moat to
it think doing, basically that. all are if you so And we of about does
I be gotten the of the it have XXXX, you negative And because EBITDA. contribution headcount leverage standpoint, keeps It's in a breakeven, now but like a through of an is the right of of leverage, and model one. a advertising margin needs flowing headcount In or think advertising. period where been showing basically if up So it time on lot acute from to the because drive has spent scaling of of a and bit X% negative about lot X% to that shown step kind not incremental just dollar of with we pointed, as you leverage in. lean either rates of revenue session is which Basically Michael EBITDA like economics is big just XXXX, the but right negative we that call of new every now, under XX% started a efforts because did what international, mix the mix shift up coupled shift trajectory a U.S. to Paragould call to have year in scale opportunity at
a you few for quarters You because of And lot growing plans time. having you will that this start fairly, over get then through flowing continue leverage the to advertising OpEx basically, slower. and quickly as place, a this already in will down period less hiring time OpEx go but frankly, put revert
of that's a your answer hit also. few to try I think So long-winded like a things, are key question. understand kind I on to important to
add? let have Michael, anything do you want you So to me,
have you covered that. No,
comes question Maria Canaccord. next from from Ripps Your
is open. line Your
suppliers. talk revenue And us in help brands program, strategy. house Could couple house increased do shifting and this the brands and years. you what you consumers some margins does to the substantially see extent of contribution it house Can of of Things your both like a in just where mix, brands over you you, on time? advantages to about refresh
kind specific give your question. are what you of to everyone brands for I'll recap just then So color and some on house
business. obviously in certain they cases, the very and those work reality The So categories total Delta, large small have our are Moen, where with know. promoting we appliances of these brands small we supplier, in do know is know categories probably are coffee those we're word so brands Well, we where so electrics brand. do, makers are Kohler, of what something like the plumbing portion their with GE, they consumers brands
in, our know has they think vast, really bed, in to the them, want price the does want accents vast and is the or to what their names amenities, business, and in majority to that based pillows vast, they to or esthetic consumer any want the good brand the some decorative space. have they right to the them subcategories look styles in bathroom not quality point that furniture, the or the So want selection is navigate on that or of bunk find do room there, finished they be for about or that we lighting the is the speak fact to really
found do we there, a whole of what can can brand. ontology create so what that, is, is And we we
we over they And the do our can that the speak XX seven than these item to then suppliers what which fully fit. create lot to home market, speak is everything item quality, imagery into these good in a then do. can price create of that doesn't we environmental come from when point, And product to case space silhouette allow that can that brand to and each maybe is, brand style, can have brand a we would we a appropriate So do spaces, priority shoppable. item. items the life -- a rooms in we of way And And spot brands. more spaces, our where in specific a
who it a just not has the the navigate. to really good center, brand, decorative to want to that of the perfectly consumers makes that being of has created for, it because them just shoppable. move What it's doesn't brand they're accustomed a has had lifestyle to side shop, they're And that And has price not accents. they easier the whole in just consumer with tables, rugs, item brick So try we've the what they're is it's for lamps, it then sofas, every has therefore suppliers even a really to then is, brands easier of it it products looking brand -- know, sofas, to the right Right. mortar, value. find volume in for brand, have and and happens brand item -- front are it's accustomed
find that customers we is benefit look, they way the love. us, help and the benefit, an they want to to about they that item to find think the So navigate
their advantage capability have merchandising order these competition get Second, modeling we photography they actually create they away an assets our competition competitive their perspective. to XD channels is a item; from take we from for because advantage. have And less the it, then the of like we render direct kind on in better price our really love which between benefits, distributions suppliers, get of to to
or Wayfair drives even what other are sales, we that because the showcasing there are from like volume. way where is as well, because they are Wayfair excited, you don't they mortar that item items an in do catalog item And like that have a their that brick as know customers way you, those actually feel competition. is supplier, big they in feature that at their if and this one a other goals and don't of customers customers, more in in actually So maybe words,
benefits benefits so of for for really a conversion works lot goes it's well And starts around there's for the as it's to item life. the so everybody significant of, sort any and something navigation that all and have three. so with well and consumer us, the up bring But,
share, of to update XX%, you was terms continues the In we something grow. over and gave that last that it's
So than small that I are frankly branded categories mentioned some plumbing. large can it I where categories, mentioned, XX. expense higher higher we Obviously, where end, are -- appliances, have clients, in than well,
majority business. but never will to XXX, of to get -- they going our be it's So the vast
from comes question Oppenheimer. next Your Brian Nagel from
open. is line Your
So two questions.
prepared overall indicating comments for like you First macro concerns environment, there. off, some sounds so Michael. I it guess, your discussed first you In the were out
the something there just we holiday that's for be the time your for upon environment on my in seeing your now just little key this business world, that, business? that should is that are question the reason to mentioned on the -- weighing color you watch worries you subscription have maybe MyWay So more that the in in that, macro more for enhance second and you're we over going season. metrics the having expect given there you're the simply same or plan, is, the all I question for how could or And Niraj, you. then have we on Thank program less
think, part now, right period. an and of macro noise and environment, It's is the so Look that, right. it's on there extremely uncertain volatility is just, it much just I
you stuff. you're and guidance to noise, -- with is the team, and few try up had sit elections I we particularly, when months, holiday look out it sit makes a so and down all to leading just that trying And few a the there months is a harder. lot what of period out figure It other
so that driver to opportunities business I'm thing online. in the seen that the we've we business that of And where our remember, some would it's guess, of point a I pointing challenges sort specific the the or And there's in not our that big softness that is to. is, shift one
this of grower. people not driven whole another And from part and a likely by a movement of you're business that's you're X% -- sort and this sort in And perceive a to of methodology so you're a in macro feel of if to systemic one. big you're a business grower, shopping is that think, shift, environment growth XX% a more and massive one if right instantly understand changes, that's I
job going on. our to part feel and macro I comment for and TV's little type the less You're reading may the of that a impact of it's But would that to some whole of that less is trying as you're how business. thing so, what a not of bit my -- understand environment specific
about. -- second Brian, about question, here's the on what on we so the so think then, And second -- MyWay,
that to and customer whole loyalty focus earn our more, customers' have frankly they we've what is on and more So to experience, so to these add that's all and our that more value seeing been initiatives so come ease customers to are different engaging, make we and their we it business best experience basically meant the so our our back life happen. basically and from have us
loyalty about you then, So our think if program.
us is time spend more us to customer Our a it fragmenting buying that from more to shopping with benefits want a effectively make advantageous and with that, them to that vehicle loyalty relative help further of program bunch effectively for elsewhere. rewarding a to by spend
loyalty, believe same structurally there. there, long get one it's And in And effectively loyalty a long leader, for a run of earn of discount, out of that course sort lowest earned of are revenue, really hard price kinds we're basis effectively programs membership customers' very be it. a cost time out can term membership a some any for provides price to because pop as the being that to kind the be common or you the paid a player. kind so, programs thing, little unless leader, always different have you, couple discounts fan in you there's they And can those of because the exchange most either for be the by you you it's trying we in don't not
environment, their themselves And the programs so and the what this because structurally challenge led lifted to you're most get fund membership folks are do how seeing challenged, you're are they you're it. that. current truth order is seeing in when they And who offering everyday of discount a price that the in seeing
with with lot experience, long-term additional and the want fundamental element but offer, actually you is significant a us around also and around us. to is of or view the more allocate of more but just to we of that could maybe actually there's get a you quality pretty time wanting one is to or not are earned financial spend the because access far that spend value, and not value unique price customer financing or are every things kind providing delivery good actually in our loyalty excited value, of get about services to nature, earlier, perhaps the like is go experiences, access So, so day events little customer value price, their to advantages, more the major
create both we're to go series see frequency Wayfair think with the to my them reason if that's to a really about fundamental benefits look what we get at see, get see are weigh those X.XX, down. go percentage trying trialing always so offer know, newer is we per same to a we've you drag from it year up basis to to for the followed, spend mix total those up, even can you highs, metrics year And basically to experience of to want why participate. the superior -- up up, with way which a look that to the of is to And to differentiated look shift the those all businesses, spend customer is, customer of are time per go key purchase to way we metrics, do our basically up. per that's customers the those per And $XXX. is would and the But look to in our
quarter and that those faster than has customers. guys now good XX% every total of the new, to on and having VIP it's up have momentum we're grown VIP you So is
do so, kind over are view we designed to what time. And of what program to how to the we continue hone that's plan those and we've really loyalty metrics, further see quality And expect it. kind to think facilitate to that. climb continue high would it will and advance we be it of And
conclude question for call this will back Q&A I This at the time. remarks. closing our to the over turn session presenters
about way. a you our thank business joining things everyone, about this definitely the under have excited future morning, the prospects for Well, lot very and we talked and we're we
and So then anyways, year rest you the thank have again. great of a
you, Thank call. will conference today's This everyone. conclude
may You now disconnect.
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