W - Earnings call transcript Q3 2024

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Operator

Good day, and welcome to the Wayfair Third Quarter 2024 Earnings Release and Conference Call. [Operator Instructions] And finally, I would like to advise all participants that this call is being recorded. Thank you. I'd now like to welcome James Lamb, Head of Investor Relations to begin the conference. James, over to you.

James Lamb

Good morning, and thank you for joining us. our XXXX review will we third results. quarter Today, Officer. Co-Founder, Officer Co-Chairman; and me Chief Kate are Steve Executive Shah, Niraj Administrative and Officer and With Co-Chairman; Chief Conine, Chief Financial Gulliver, and Co-Founder

including remarks. I the on us our We statements cannot are will all today's forward-looking for expectations fourth that statements today All to on prospects, made available believe have guidance regarding for forward-looking statements, call strategies, We we forward-looking financial including, we you quarter our trends of consist limited our business information and would to, our XXXX. been will assumptions. today's today's call although that in those Q&A remind be guarantee date. will like following be as performance, prepared and based of but that industry any not to accurate, available of future reasonable

performance, of as publicly adjusted during will for filings future of any or actual statements, result including section our presentation, release EBITDA our non-GAAP GAAP the should that and copy XXXX, a would forward-looking financial like on measures for results. Our note being quarter website be we our available Except with descriptions to these certain this the measures IR to reconciliations statements webcast for should differ and together made information, which call earnings to website. I to results cause flow. SEC review over not discuss update GAAP This any of cash subsequent company's projected of comparable EBITDA, measures. this could obtain and we non-GAAP by obligation new from Relations today. of materially events be our and whether the non-GAAP in financial to the XX-K now please recorded, revise investor free Please Investor otherwise. Also, refer and we or contain undertake a our that law, replacements be for call, as non-GAAP call any margin read required measures and those adjusted any factors replay is to certain the to Niraj. XX-Q nearest These as identify no of company's considered measures a financial our will turn

Niraj Shah

while everyone. with share Thanks, sustained marked market you results good another James, further challenges the the for to our point of resilience category. quarter Once and environment quarter morning, driving again, that's face just costs EBITDA for the discipline picture. of margin to achieve excited in today. of row. I'm QX in third consumer a on mid-single-digit in with we piece proof dynamic Wayfair adjusted one share second further navigated capture a a But the

is of North making totaling across noteworthy driving before, these in Star mentioned compensation $XXX pleased CapEx, million As we're and our equity-based improvements EBITDA almost each year-over-year of QX. times excess in I've and many adjusted to be one

price third Consumers spending of elasticity and are months of than we've trepidatious the remain quarter a choppy trends more exhibited saw in macro early their XXXX. demonstrating seen The the patterns we in continuation year. across

are optimistic to recovery the that for the even market strength. were the as We is lower right which coming it increasingly to in election. Attention come. pullback a in we category traditional and quarter, an lower are exited versus support is broader items we together Day ticket we the the now by of represent customers focused ran saw start the fall, seeing While the of event extended response become clear Way with shoppers has pieces were in that we pleased to away our from larger at consideration the quarters purchases remain home investment, that over for as time lead-up the we first September when this a area

relief months changed in take of to poised they homes study at every lowest hands time out, While their it some XX in in the running that to to provide U.S. the QX, the X,XXX has year, improvement first is below turnover the of an than market. Redfin more and play back noting just end become levels this XXXX X what the of in a saw in the analysis level housing some published will historic back XX% XXXX. slowdown

business are time we quarters, specific the in many for a said we've the of expectation with not as any Now running frame. recovery

to in to driving discipline growth. up more For considerable cost recessionary simultaneously, be run category profitably than to and X things and business the return environment a ourselves done beneficiary efficiency a X spending does the when we've years, setting

vectors. seen G&A we've had the since a what costs quarter quarters in with now of fixed sequential seen you've across quite SOT is is demonstrate X our third that You've clearly compression former The the several result and lowest us latter XXXX.

bringing is and include when homes of we the over an branded customer day These Day concentrating best customers to Memorial strategies drive combination their X competitive March recipe, moment, by Even XXXX, and and XXXX, their and into wins want of much delivery Wayfair together first times. in several in destination. mantra shopping to out. Across the day including want large on refresh to the if our initiatives fast availability we focused further on the that many Wayfair brand make step broad our major core mind For at launch sure format pricing, we've time orders such store aren't our back that efforts share frequency, weekend. offering first of a come, the spoken things does for as

loyalty our week. just offering, is out initiative last began new which rolling Our

you high value walk shipping through me Wayfair to offers much investors per of and so line. We customers experiences events, on a exclusive unlock with Wayfair access a purchases, exceptional will dedicated the Rewards support special including year, and back [indiscernible], $XX level. shopping on X% benefits know orders members-only For model business at all love free Rewards let how

Wayfair would for breakeven shops customer year, a per our on X% per average around typically about shopper. Priced roughly twice order. $XX $XXX at be spending back average year, the Our benefit

goal is tours higher. X even that Our into orders your or for push per customers the bucket out year of bucket to

While single more past than X to made X/X active path behaviors the self-reinforcing, the more is of in shop on but category Customers that to figure order X come see X increasingly and than over or customers who are broader see and selection more likely per flywheel for shoppers we more XX Wayfair as we to least grow an period, that catalog important time their on X we even Xx are orders in site, time X path the orders from rouse grow only those occasions a likely to to year. same Wayfair spend quicker to us customers from X. year million also typically shop at to our more on the There's they We times in shopping app. These per move that shopper X months, about placed via spend purchase frame. the opportunity the shoppers XX-month through traffic. have have see to a nearly who a not any a given XX that have of are XX or more the free from more

highly that cohort to is margins. growing beneficial So

the the to on potential will customers order Wayfair as share that customer much here a deal ways frequency grown we've wallet at program benefits average aspirational a That program. Accounting With the to able year direct are for makes more Wayfair as from different are on include now member well be $XXX time thanks incremental Rewards, back profitably. drive Those amongst our Wayfair new an over goes with likely worth as the our annual the upgrades. rewards fee, revenue all if on revenue, to return big grown versus tremendous even about saving of sales by per basis. to customers in efficiency nicely shoppers. doesn't to advertising exclusive competitor, up $XX new X total of existing more that a piece to customer, per hunting Rewards $XXX the of for the XX%. interact of we've orders now which third our There's excited We're customer

for. We're incorporate in of where stimulate the We've program. who yourself touches encourage finishing lot renovators kitchenware, to can value treat frequency eager shoppers to or movers of of into to the the new lean tabletop, we're the bring angle customers their benefit they been category with on remodelers. that bedding focusing to Rewards of project we're high attract across budget We One and rewards catalog a portion organizations, business. but program and the to dreaming like draw also decor upgrades our the those needs have of use the from and and value their these for the had like value better of in Wayfair These is excited proposition really to the sales marketing been are customers plan program time and to for areas may stands audiences out. not and those have full all some our outreaches excited

You've our likely brand since outreach marketing of refresh. seen some the of launch this

high-level video. Since customers with in after degree Much Wayfair an like was to as pleased in has message QX, extremely channel. consumers we've important focused right any seen advertising funnel measures and customer higher product television, the media qualified of well the is discussed streaming nice the the recall This advertising work our in waiting, we've acquisition at months identity. resonating years making, recall they recall across details and audio in increased our the this social spring, key how any investment since. which seeing our how debut been and we in seen our from we've As is we've results been of view in and improvements and the what

retailers. fact, In top now the are in major among we XX ranked

for talked creative of channels exist we launched as serve across many our to about come. we the Wayborhood, content campaigns advertising foundation could of portfolio that a and marketing When years driving

few towards movement major out for traffic the In revenue more results when as the the a ROI visits. Back per how the holistically the the to development weeks, launch spring, of more seen behind. strong with symbol view campaign update of first step Wayborhood direct Wayfair. funnel with on where mix iteration been our into very in the [indiscernible] has way positive and our first grown alongside that of importantly, we of to even XXXX. We've It coming has as be our next to noted healthy direct now parts incredibly recognize come are translated to an our core inspiration home campaign are exposed had Wayborhood Reels, marketing content linkage lagging as came are to advertising fact, the I looking holiday in and we Instagram refreshed brand as channel the metrics, are and active should no rolled it we've and past influencer Shoppers purchases. the their surprise to a more customers important quickly on on customers TikTok routinely awareness in category. for This chapter in of more comes that

succeed technology plan the today significant eager with succeed. terms same suppliers. to investments in This we reach relative potential, we're We treat Our with from quite working. on it. Based and supporting community, scale is feedback to improving mindset Creators when small program. our marketing the we and influencer treat made because the to are and Wayfair work creator is excited we've our them they

X,XXX content of and We have piece dramatically monthly produced growing nearly creators with. by we've increased the partnered our

summer, spend the we've amplified for are tested. return the our influencer ad promising on Over dollars content seeing and we've

are be fact, what lower In we've we on attracting find social we that payback to with higher par on funnel seen ads, lifetime windows customers. value all expect while what

product to This have We're one platforms. to scale into rigorous it XXXX. The the that to within as creative will often still thresholds in us, is clear partnership activities will the an our to across here talent allow with with year road a ROI of We our you. field and dense door open quicker. extend but map but we of to much make us working are that want with suppliers depth payback operating influencers breadth get wider even clear up we to major

while on strategies accretive goal relationships let short-term like building the has you driving long-lasting and marketing major on our to with to to all while As initiatives success foster I value. By just a me pass will both Wayfair mentioned setting That core bottom build it our all we're leaning in and introducing laser-focused holiday driving Rewards the profitability, festive programs at spur ourselves Thank our customers up customer have the rebounds. that affinity and we the customer to season. And enhance business financials. remain through as healthy the experience, X now across loyalty been Kate economic category brand that of XXXX lines. for repeat be outset, We aiming not gains, of for go hope you. into top

Kate Gulliver

everyone. and good morning, Niraj, Thanks,

into line. X.X% versus and to which typically in AOV, top the our sequential second the the in X% down in again, down ago we third by dive Net expect quarter with line moving sequentially, up is to the the period what see from sequential year-on-year Let's beginning with quarter revenue third year. year pattern on down we year-over-year in seasonal or a the modestly offset in line of X% X.X% was would saw down cadence X.X% closely about the was driven by orders results, with XXXX. This QX basis,

Let P&L. to continue the walk now me down

remaining As exclude same discussing sensitivity and the XX.X% will net length how from drive for promotions. customer compensation, I and basis about dynamics We heard depreciation equity-based that but have in differs when lean Back as to revenue. and include opportunity around amortization, price I outlook related we do, we on other take questions identify please quarter of many use was we the the well. Gross changing in taxes financials margin to capture. funding this and the adjustments. our note talked August, rates at the order from investors incremental seen

to down the take a me answer comes let to that fundamentally magnitude. address because So moment

we retail, throughout. seen by suppliers funded margin where gross reflect we've been at a of our moment promotional These through Day not centered to items off price, part suppliers XX% discounts demand remains and tool our and then grow aligned the in prices existing see high. that remains reduction That's in or and reason last just when events, now, in marketing are on Way why like we've the promotional is participate in robust a engagement ramp lowering headline years at For events which Promotion to promotions interest we up customer focus resilient remains supplier XX%, the partnership are the month. their events time critical to to by happy number of participate are with with you'll did wholesale drive home while a in quite more.

you'll to at tuned would our XX a rate. the we're which to into Across with of reduction range. from the lift collect investment talk quarter, amount data scale XX% investment Now different from about and from determine a in on when precision, orders of half suppliers nearly elasticity own highly very we an making price in a the million order consolidated gross XX% our see margin able our take The tens degree per geographies modest is very and [indiscernible] tremendous classes of exactly lower basis lower of take promotion. discounting the level, hence, points the rates, the targeting magnitude in the here is of see

said should because this to considerably gross expect results incremental continue gross have end. made it's at valuable multi-quarter you this seeing year in time, on and We're miss we will range of come enter the the that as order far the that a were we're adjusted an so for top profit XXXX. end to and EBITDA price we gross low investment, some keeping pleased margins our as this margin exit As they dollars more we've at with order out we've that in and

revenue question other orders is you are make the still and why hear from year-over-year. contract if investors seeing course, we investment Of this

picture. to that is to point Our more once to the response share

when to driving sets while outpace our ability shop share to still up to fashion more in earlier, a business, allows more. category for margin once a said of and strong the growth home strength profile Niraj the begin for us us the As capture now customers for robust significant

were We're that in while investment higher renewed unlocks is steady X.X% service are each wheel windows. revenue, Customer of strict with been advertising That merchant slightly result spent our the are a the outlined. as for advertising as and the on hand the recent our a but payback net was to dollar quarters margin than was where Now Niraj the down moving P&L. adherence fees XX.X%. further excited of seeing keeping ensure advertising funnel across major opportunities we we had

operations, selling, and improvement year third quarter $XXX Our technology, more third million million versus trailing XX-month improvement million than $XXX quarter, a on general administrative totaled expenses $XX the in and the last basis. a

earlier, have were for our different investment expense As X made had cycle Wayfair who margin profitability. over to the What fundamentally the have history a may we've that past. we I company you clear is talked Wayfair of in of about now is in flashbacks at gross years than past followed advertising and years investing of those the

of drive both can We growth we are at level scale where profitability same the a at time. and invest maturity for and

quarter why to this of when take you into quick our growing part are as and or adjusted are of we these revenue. cost manage base. XXXX. comfortable are for payback, discipline million that can paradigm, to will leaning focused in further advertising Altogether, committing XXXX EBITDA on dollars funding their adjusted continue being we generated adjusted due of uphold. Ultimately, talk see $XXX of to rates fixed X.X% [indiscernible] through about than higher is A So I compressing we EBITDA we a net the we we margin investments third

with larger billion bolstered when course, we've $X.X consecutive of debt of investor factoring earlier, this have that quarter now year-over-year our and work As we to close was a of we many at testament was, further the despite across revenue done margin, that equivalents credit proven quarter times the the cash contraction. We EBITDA in our and offering raised, was we total second $X.X ended October. of can business. we which undrawn early liquidity and balance than our with the This $XXX billion operate level profitability We this Niraj saw million revolving cash inaugural our in adjusted mentioned on before high-yield of driving demand tremendous the facility. mid-single-digit

rates prefunding derisk in our we and effectively by profile movement With opportune to improvement in the spreads, rapid time across saw credit maturities an convertible the sheet balance upcoming financial [indiscernible] our and XXXX.

the delevering proceeds of combination these use year, to our the on our years flow come, from to own generation said the in handle we I've beginning we business will free and laser-focused are over As with coming the obligations. cash

Now rounding cash offset due Cash was than million. $XX by bit capital timing part. This to flow the expense statement. operations in from our $XX on combination range further expenditures out third the a a of rigidity CapEx our and was million quarter, guided of lower

So or end will be while catch-up will be cash lower guide QX, than was rate flow negative of the the QX there the some third free in implied. million $X quarter. run still net The result in

guidance Let's down This to in round range. seasonality now sequential year. the Beginning quarter-to-date, out to in quarter what down low with as single-digit saw turn line top and full we the with flat are slightly expect last fourth year. the year-over-year line, we we the quarter to the end contemplates

environment. Day category all consumers right the on with in the strength holiday distractions excited challenging saw now While on are we're season the ahead, top we're and of the also create operating the weakness a pleased facing that cognizant we for Way

a get dollars to further see should guide is here the merchant as valuable see just next many in take likely areas again into important up lean of driving margin, once we we of few This XX% service range of It's payoffs in to XXXX. end net evidence to XX% end towards Advertising well. below again lean revenue as the on gross strategic of the of order the we XX% and today end share the should XX% as Customer to capture, of to order we capture mind in quarters. rates and high-value X% higher where are past bear capture continue in in you in drive upper to in than spent would in lower fees the to we the this be Turning opportunities to that quarters, demonstrable range. as few clear range

in We Finally, the shift SOTG&A been $XXX should that range. for saw quarter million to million some had $XXX QX. to the fall planned spending third

you sequential a trend. about there's So as think normalization here slight the

down on challenging a quarter our made guidance dollars, this to steadfast this the least XX% testament to fourth environment, X% the XXXX the P&L which cost right top focus lead margin in Following EBITDA drive adjusted in line to efficiency. puts at with we adjusted growth us X% in a would line to EBITDA a with commitment is range. Even

few Now touch on a let me housekeeping items.

in expect been both post pivoted several pre-IPO long mandate top there over on this to history. in on outstanding million, the return unique approximately million, million, years, You roughly CapEx and want million adjusted depreciation the appreciate more come many years the healthy and has the Wayfair's $XX of driving how would approximately of expense and compensation interest and top out $XXX appropriately weighted this benefit spent context million sequentially revenue past approximately of and for fourth XXXX free should in of $XXX sure prioritize amortization million to growth the to bottom of make in the $XX a the form of our million equity-based we of of generation up average cash capital expect to round $XX flow expectations taxes a net related $XX range. Layering EBITDA marked investors dual progress quarter, shares the working We to $XX $XX line, and year. I the profitability. to with on focused to million XXXX primarily XXXX. and balancing to is just business, has then IPO

back I from the out their letter and shareholder year, close remarks Niraj Steve's from want we to draw to February. As

next but for shop or Our just place We decade and the mission believe is to over best year make quarter the the not the to a the beyond. home next Wayfair as in never take of to excited best I to questions. tremendous your execute been front and now you. And more Niraj, have opportunity come the will Thank is against Steve us. and yet

Operator

line your And from first question Arounian Instructions] Ygal [Operator of Citi. from the comes

Ygal Arounian

Maybe share that seeing. on just first you're the gain

If more? bit factors see you that -- quantify we or qualify from I it that think do coming deliver that? positioning you the Is can you're market can, little other don't seeing? that better And that pricing the you as how it as know, gets all a the do you're for about

can the the any And think doesn't the then EBITDA about category on XXXX incremental beginning of we that, a that mid-teens the level more through that least? improve get around color we year, commentary, EBITDA we how at confidence next about of do you way talked Just maybe work in margins? our as

Niraj Shah

Yes. I want you Thanks you me anything through Kate, then let for to the Kate, jump can add, if them and run questions. in. mean, there's

one So we're share on around first the the seeing. gain

in share. share So hitting of would profit every dollars, mentioned seen the of market XXXX, how that the gaining I'd quarter, pricing optimizing end say pricing, since we're in since say, highs I our certainly maximize credit on panels kind to we of it's get market you of ourselves all-time consistently our And terms and it, the one thing. doing we've XXXX, card fourth quarter

there. just the points. ongoing Again, one was optimization our the elasticity to to many really that's do on that's just things. just that, [indiscernible]. I position But of But low quantify of price didn't maximize of tens an basis right? we kind change we want That demand

made for on we our about prior series for calls, increases can That we've logistics grows talk and live right about in levels. now we've Houston, or our talked improvements about is in example, Las we're logistics but done network. that delivery, rolling talked example, we we which whole of increases consolidated service pricing, So functionality speed, business. the kind out Vegas, features a that of customer nationally Like,

we the the That's can a website, our big had rate, our faster, years feature from working of But what of [indiscernible] spent apps, lot out optimize of and on as seeing roll replatforming the storefront that that on experience. is done to they've we is pieces and call function gains a technology. much developer that. we're very couple last the a team our now, back high So

the gain share improve take actually drive can to way market through we're outcomes experience, long customer conversion, is customer list of the things kind getting. reach, we do of can optimize we the up So a

market economy getting so And a look macro we ways regardless in of of grow continue lot is we share better see this that's category the not. when to or whether to something to XXXX,

ways as what road line, good while of can our if -- seen in very we do about scale on and of we're on said have the a So counting in because EBITDA, we ongoing XXXX road kind just the for we for see outlook EBITDA dollars a category. know down we share the XXXX being that, grow that the money market about around I quarters going I row, described find and as know you've forgot that smart And to or X we SOTG&A you've know see we're is durables to think the that's that is taking a map. what share. And Despite come play. we also continue it's example, X that. then not pretty lot don't dollars. on way, back the continue to map discretionary that. have how XXXX That consumer how around cost is, market EBITDA being a We I we optimize is now. to under We just pressure number, are XXXX spending of where seen And that way cyclical EBITDA good for dollars a us higher we're to of business than

over you. Kate, But to turn let just me it

Kate Gulliver

we're in have the making exactly jump want we dollars. typically And we on and our any adjusted of execute few given over which now XXXX don't and to seen just commitment, be combination focused is EBITDA Niraj years discipline XXXX we grow to on to that growing I and said, haven't give can to focus the said revenue. to you've cost But the all we annual that the last guidance guidance. Obviously, Yes. through that clarify. us we continues investments and as do are is that

And a EBITDA will referenced this positive see up on that so discipline, showing that how with on in that from dollars revenue come growth, which cost adjusted help front multi-quarter we combination basis, grow in line. Niraj adjusted that's on SOTG&A EBITDA dollars us

Operator

Your line the Christopher from JPMorgan. of next Horvers of question comes

Christopher Horvers

you're single bit quarter, the is the revenue the growth quarter-to-date, little of you're guide, So digits. digits parsing low here, fourth revenue some quarter modest my assuming first down but a low versus in single slowdown question -- in to in flat balance

pre-election mentioned deferrals. also You

can you if into together for quarter? later slowing get consumers and So that bring trends wouldn't into sales pushing why the us all holiday election the are better

Niraj Shah

Yes, Chris.

think got talking up. little I on We've little what's time. that something determined days coming bit of you're and or you day. got be a of in That you kind in shorter election about So a macro. calendar a season is -- of the that may number holiday the a challenging take have really that, been could the one or That's not got may you've

So bunch you of a have uncertainty.

yet like still you're we we feel and to of looking you're you forward and be. have think of take where uncertainties, continue about quarter to you So of how to kind can share. to lot out some a to very the have revenue trying good But these the you going come figure you're

Christopher Horvers

you -- Way how ahead obviously, maybe how versus Way think guess earlier, election having that the purposely you but that timing do around Day, of is has significant Day? I slowdown the just that shift -- I And longer extended significant a mean,

Niraj Shah

X-day get dramatically certainly that sales after Day. to happen Way that, event is to right advantage affects how did, how decided from event. Yes. major did how Way bunch we I planned we I we of in the that. some built we out, for hindsight, don't going. flexibility I the shopping we -- in we're playing We week And mean as time. demand going pretty happy calendar planning that. X-day we a that that over the Day, X saw you of saw maximize with was a take a retailers a know but how We've think online We or That's played other when

just I macro, think the harder just it's makes it to it predict.

and I the this exactly that basically thing that's of come holiday could out when is a out? say you the all at seems just look to with hey, forthcoming possibilities You how think I would plausible. biggest play like, going range you're season

Christopher Horvers

then it. about makes for That quarter, goal the our Kate, talked mid-single digits. fourth And on operating forecast you sense. margin the Got hitting we're of

the You not the the time, did at in but the fourth same mid-single quarter is X.X% of quarter, guide digits. third midpoint

to of of of said extent that to I that achieved that the goal is versus you've would that then spending? said perspective sort get have from guess just sort you does And So of what of that that? any a and you've timing hitting undermine view seasonality mix

Kate Gulliver

at marketing guess fourth that quarters, think question. quarter result, last heard we can is quarters. to EBITDA we stepped obviously, that to I'd on the adjusted investment of nice we've that the that, that going incremental with look guide drive incremental up over right? incremental bit. way Yes, of proven is bit we've that you X for thanks the the then operate we a think, little Chris, next very at range get spend. as to a I And few point. And revenue is it the net that and digits, And the over What little is, a discipline shown, mid-single that I dollars

clear that is spend marketing be of that are we place to the want I final a bottom disciplined. quite So

adjusted really the visibility, EBITDA the dollars. both We good where have very we and And feel to the driving ability and that of that's drive for. in confident we're revenue

Operator

comes Sandler. next the Piper Keith Your from Peter of question from line

Peter Keith

So of dynamics. election on just advertising the sticking and some

spend highlighting high now election are But rates around that season. the the ad very ad hearing from marketing. right you're elevated stepped-up influencer we're the So also

you you into think spend going going and are the November, ad come think forward? about going the Do how So do down in further overall forward? we get as costs to December

Niraj Shah

Yes. Thanks, Peter.

certain way elevated the preelection. will to think ad the about So is, of market parts definitely rates have it

funnel television, we're you messaging. this channels any how in for we So of could use very think about which the And this remind to upper the just as think of -- you, quantitative as money. we variety spend of like local some

So won't in spend. that chase other words, we

again, course, would to sense if So media. it economic else buy makes medium. can us, buy that And it someone and if not becomes economic, that we it's of

And so that's of one thing. sort

think talking payback are channels of whether types influencers lower we're funnel, like channels. very that about specific narrow advertising. are of Those that you separately, as Think fast or about to and some different

And ads. find so political those aren't ones where you'd

ad quantitative segment sort about mind And in different that we're a when of kind so that's spend. market. to I think is talking we're of the just to the of the in But advertising very main just keep thing

the local but not So local do much really in really much we don't for we're And channels those not that's don't like do in television get after cheaper yes, election, example. participate that we economic. anything television, --

Peter Keith

Okay. for on have separate then Helpful. Niraj question you And just Wayfair a is Rewards. I just

have was there. X you am to loyalty recalling ultimately was I program have exciting disbanded. it out did or a program loyalty which years X MyWay, ago, So a called

what's about talk make different time that might stay? from this just program MyWay maybe So new ultimately learnings and the loyalty this

Niraj Shah

Yes.

biggest we kind So customer the value with from strong. had MyWay program, that proposition it learning the that associated I our of think just was that wasn't

breakeven program would those customers annual members contrast, be offering What the the They in to about what bat I benefits, think of Rewards. other only year, you their events. early back. about average tranche spend. getting line, off up right think customer the Now about access X% basically a that we're call they're $XXX That the on you the on Wayfair already, off if service pick talked if on sale customer

many purchase. against many, few every works home And spending time a dollars it way you're could the already retailers. a make you obviously, if your today you next a is thousand purchase, But customer is that you rewards spread use dollars getting in across balance have

with that they're spend $X,XXX that get So incremental if Wayfair, have to that next not on spending you them, think us, about going for some rewards of spend. that $X,XXX, with they're cost and they well, the some programs

engineering for makes very change to obvious it then spend. you to the And their a could easy in program not And consumers. exciting but benefits there's basic of other it they program of bunch of the a customer that some so you economic, kind that say to be has drive want and the are tied where they to choose

And very out start I that. think, for as don't good And in the So for a wanted reason, the traction Rewards, have up. weeks. setup. see didn't happy I couple not got we're [indiscernible]. MyWay with with only of hindsight, good we've a It's But there that Wayfair been did right? we we a think set it's new,

Kate Gulliver

of speak the the loyal on would Niraj just Yes. add, customers. to call, you I value heard

have we the good is understanding so ROI someone customer of overall us a that, value with And when very increasingly loyal drives the lifetime that there.

getting that that we had from driving And and designed with so who reaction. of getting the can we folks concept this program were order. a tested their good spend, know And we but incrementality third is customers portion really at fourth we be

excited really this for do about how we're the for us. So perceives value can both and what [indiscernible] it customer

Operator

is question Morgan the Gutman from next of Simeon from Your line Stanley.

Simeon Gutman

first. A couple of questions

we demand think think doesn't, On home to going category? what you to you in or that the curious, the in continuum? I are up, drive some picks do would that the category, pent-up Where category turnover it drive furnishings, is life about turnover if -- think If rebound. housing

Niraj Shah

Yes.

that and well demand stimulative obviously you think kind housing existing phrasing the So you're to home of picks that's in the sense -- I highly if up, category. obviously, it sales

significant -- strategy is seeing needs to its which that of clear, we've before the becomes own enough This able less be top market has had years during I elapse would is our take for gone why down, but about signs been are share. X demand, basically that there to pent-up just what, We to XX%, time how is much we've on market thinking say. stimulative mind but

that. we so And are doing far than better

strategy but rough fact numbers. whatever, whatever, a very North it's there's the in little things in a not doing. on $XXX out long fragmented calling that tail, actually can you're being now think billion $XXX, billion we kind of share if was all And there. And share it's North lot of time in counting who it's on over out our still that's over or middle, argument of billion the a nicely the $XXX harder we're being take going about of think use seeing we very category differentiated rebound really why is away. plus and America, America increasingly I having the that The category, a whatever, in with are think players losing and sort as a that spend you

[indiscernible] they're there've declining or recently of a of seen You've lot -- that more players a kind business. where been going got handful out that most from major

think so the opportunity definitely us. And changing. are I And that is there's real for things this

it's course, to the to it's of be timing sort growth, have. we too. of given pertinent when But And with easy I think and that think I do, there's turns, yes, don't it's going of don't category tremendous amount like the really very strategy

Simeon Gutman

to dollars how outcome? point up to a modest EBITDA I'm you'll more will all say, of where the them to to in of construct much market lean you market going couple share to And of north on essence I growing you say a you we're that's which a a it but obviously that's for question? year-over-year, you XXXX. taking not The share ask take could, up on dollars just lean let's to dollars then in is, actually of question or just There's are looking just that follow-up drive posture And want way, room give of market when hundred or how more share million questions. much if achieve going you to a goal 'XX, and of the sorts lot your a in of meaningful the know the be once construct, at

Niraj Shah

That's of drive outcome too, team turn you the rolling day, not we the will a share. have example, interrelated work hard is I've meaning have have of it costs They're cost. of storefront associated I'll will doing every a I'm people an features. that do The a those out lot That to thing experience. ongoing is incremental Kate market There's no payroll payroll. cost on there. some take for share, are those only going say, and [indiscernible], that over do The that to it Yes. things market with to

a the you that do, with would with about revenue. do you going is things talk if associated There's costs dollars you like profit associated cost we're other it advertising, we're seeing what But have generates. to

it to me turn any clarification. But direct those very Kate who They're relationship. So a over not have unrelated. for let

Kate Gulliver

around Simeon, line. the top the that do and yes, these driving bottom a I other, each can of things we would we that. in we high believe are focused we conviction with And just have both on degree reiterate, and very concert

and you're are us made where there is investments. places what making So hearing we investments have say select are

obviously -- You line. last gross to quarter, started the talk we margin in that about

how marketing bit spend. that a little the showed up talked this saw about We You quarter.

things top on that that's of years that in over mentioned takeout well. the a throughout as taken down 'XX. Niraj X out quarters capture. and we that out these EBITDA disciplined dollars basis, few seen incremental that we think cost down We On are SOTG&A and drives do already over last $XXX quite that growth. And drive on growth And revenue took expense, we've 'XX cost pan an ultimately, that at and LTM adjusted continuing million. that can side, order doing the row. they because to be That's end you've the the while we of

to gross seeing and profit of you're opportunity EBITDA there on us where we invest dollars. manage multi-quarter drive ultimately basis, say, revenue, there fixed dollars a and adjusted some cost you're nice So the hey, are can seeing places there where really that think pockets discipline we will are

Operator

from from Oppenheimer. next line question comes of the Nagel Brian Your

Brian Nagel

So a first question I on My have share. couple of questions. market

share you are this mass share are that a clearly, is back have taking is they market as in have consistently you question these the -- that know topic, any were a show difficult sites that performing indication data highlighted broadly. that time or look more retailers closer, has having been some I taking potentially a market there? in Wayfair they is, Or the Wayfair? I more market merchant, actually The there environment, well and big So you're tough taking of from this -- value-oriented maybe you've at environment numbers share more

Niraj Shah

losing market. winning share. just the would a just so and it's not clarify people to fragmented to say, a But few one I only share. large guess There's I we're what quite clarify,

have think the job so highlighted, over other And One last very also few X a good who have done is Amazon. years. folks I

played good they've price a of commodity but job. at is done they really specialize, opening they point items the kind Now where

market brick-and-mortar, is accents, purely they core and both decorative ticket share. who's taking one play in textile sort Another the the HomeGoods, space, items, lower been really of they've but

landscape. there's list of well. who So And well. handful doing are folks are that's a Much doing who not the longer kind of folks of

And wouldn't I only think other so say handful we that are to kind a expect of winner. on folks be few there's of who actually winners the the only I and But side. quite a

Brian Nagel

line start stay at look prepare the in point, eventual cost That's sales incremental then line kind a the I into the are to to down costs philosophically, Or infrastructure, down? helpful, we but as and again, a bit is costs it's controlling my a you, cost is weakness. take guess at keep much your you wildcard. there second down, and to you've top this cost infrastructure probably somewhat how recovery cost question, more And if opportunity you were place? for still is, Niraj. of in weaker, Kate take But further? sales But structure still And job more your question to XXXX, look of that of then as for the done top great taking looking

Kate Gulliver

question. Great Yes.

So cost opportunity. how the at first, cost just efficiency let the start and we look me with

show of discipline, up focus where down on up SOTG&A, continuing you see seen example, to seen and the [indiscernible] although also on is P&L that nice sort Obviously, for we've the cost. You've that place control CapEx towards perspective. driving from a the growing you've the EBITDA goal nice And less of as compensation, equity-based CapEx, where our seen adjusted expense. of dollars we're gains the also on sort less ultimate cost us

You're those seeing of continuing improve. to combination sort of X that

we do opportunity it, ongoing So as for at efficiency. we see look

some SOTG&A That's it's the right? it's software it's line. us quarterly seen on that line ongoing in then some not just You've is the a reminder, a And P&E, R&O, it's as also overhead, and tightening labor, in past on restructuring seen that basis you've do labor, but expense.

pockets equity-based disciplined compensation, be of in as all as well seeing these cetera. You're us really CapEx, et

yes, we for will be is we to see again, thoughtful. tightening adjusted and we places and when dollars. it, we So are I very ongoing 'XX, at places a quite reiterate those on as what EBITDA say look about focused growing think And

So to equity-based continues less compensation we to intend compensation that to balance And that. continue CapEx improve. to CapEx equity-based so EBITDA combination things in less adjusted appropriately with that drive

Operator

America. Nagle, is Your next from of Curtis the Bank line question of

Curtis Nagle

high the AOV and in ticket large versus expectations, guess I to but items. press for pointed above one just price elasticity came the small on first

expected in drove AOV what So higher just curious and better XQ? the

Niraj Shah

a on housewares to item, accents but decorative AOV Yes. lower free say, AOV an you growing at output benefits luxury and example, Perigold, Curtis, to that's items. the of we the order. And So a rate lot, frequency I a decrease When really and one think AOV. and about right? if we in AOV. Rewards, with the [indiscernible] actually going every our increase about to sell then for platform, is that's Wayfair nice like oh, will example, very shipping agenda have way metric, talk is doing for think about business, doing we're ticket what think we're

dollars year. so per And grow to things variety doing our -- we're real whole a the customer of that goal is per

revenue. us. those obviously customers our again, think an market high and is spending ticket we we getting low of metric is the more customers a number AOV as the with combination And outcome of about as outcome orders, orders, that about around an each do. or times because kit things strategy market share think not orders way the But AOV So we more is share of of is

deep was All right with freight ocean and out, of COVID right that's behind AOB kind I items Is beds. moving? price of what's like-for-like like-for-like really is deflation all not inflation when But like rates, about talking that happening your would so back pertinent quintile a inflation or coming cycle the second of items, of say meaning for that topic now. deflation that's now. And then there us a of you're that

-- metric this the are seasonality talked and all executing us on the about. more of business more moves And these dimensions so an is AOV the we output

Curtis Nagle

Got XX%. to love how to kind Okay. tariffs. Then effectively were we the Yes, it. just framework, or mean, XX% ask go I a should would just to about if we think of question on

you while ago, last spoke think about a I China XX%. it and exposure was

terms kind China and out push in implications probably just of harder right So pricing of might industry I mean the moves revenue of is that right? reacts, on to how capacity margins, lower. and the be

incredibly together helpful? at So would just kind of maybe on your piecing all exposure the update that and an moment what is be

Steven Conine

give me hand thoughts some over and let then you. it Steve. This this, I'll is to Niraj, on

tariffs we're certainly have seen side, business antidumping we've would of yes, And on something an So seen the seen and can over say, I and impact. they a one we've the tariffs. are running this marketplace. history certainly

different in allows And of options swap across things. a spectrum to so really the products they our and and customers selection lot broad we have have suppliers, see of that for

to sort demand regard. around able move And in we're so of that

We certainly had some navigating now tariffs. practice

so buffer whatever take it's see And approach We imported the might think I and and help playbook, how run exactly feel consumers increases certainly, will will the we uncertain that better future about products. to the we they when look and out in out. may play selectively price much certainly we

of more are other side are. obviously we impacted our than it is suppliers deeper The directly

the to in as that over much as they they have to modify last don't quite past. their single-source or working just been problem they've X here year as the businesses so so And have

those, think I can. we should the navigable. this buffer so we And think And be very will all combination of as as best

Niraj Shah

wood, though, then which that Yes. happened The were only from years specific in administration Trump years mention, certain the so factories where ago. thing tariffs things some antidumping X in thing there's too, the the goods, I got and and categories the of XX% wood the But in really like happen would years, we China, then XX%. during some notable first

a built in categories, lot ever Malaysia, then, who their of that China Well, actually suppliers Indonesia, what and really so change, Vietnam more ever in you've future been Cambodia from capabilities have for manufacturing landscape should then, other happen seen they there's control that since over and cetera. and since et the was places, is our tariff goods

that that say much now risk of than ago. years were the they is X would I So more cognizant industry

X One is is than for kind And different going I years in position ago. it definitely so a we couple have of industry us. think the that of benefits was a

Steve second and domestic suppliers mentioned, The is, have we suppliers. as we XX,XXX-plus have

suppliers We our Brazil. have import suppliers, in make goods

have goods Eastern We who make Europe. suppliers in

different have from we one another. suppliers So quite are that

And benefit so our we they have customer. on of for platform the compete how the

what's So think going yes, I about. to that's that, have and I quite doing things been say certainly but folks a happen, thinking know you topic would never that about

Operator

from is Baird. question of Colin from next the Your line Sebastian

Colin Sebastian

trends, I and So shopping advertising. sort zoom platform know and e-commerce if mean, lot apps. lot tools focus a the of But Niraj, challenges a on of there's there's in and of change on assistance out and broader digital pricing category happening technology within and here personalization efforts I around we

seeing in for browsing how wonder those you spent sales time any positive And are converting or this those are in environment? just yet aren't impacts like And important Wayfair? to perhaps I if discovery so metrics even and initiatives

Steven Conine

Steve is This again. question. the for Thanks Yes.

kick me Let off. this just

We use of now new together this we're internally. morning, lot have out internal I doing going I things did how video, pre-earnings part I it AI. all with this And tools. -- think been little curve this of is best of these sort a through completely of learning right sent an Actually, to and just

if when we're going say out you best practices to in so and trouble. be in adopt we the And don't look business, the

risk experimenting our trying the on the we really us that kind it. new so teams of push and be and make leader market they're to not tools it's cutting edge so changing be sure these and around us And of things us a at and new without catching pushing to can using

a for are they're efficiency of where internally using a efficiency flows where direct some today. some different after process and them parts change improve that go the curves could are then more have we tactical disruptive trying are much have business. the they very exciting paybacks, to be are of some be very our could number So future in -- our customers And that to that in experimental have could or things initiatives that teams very

Niraj Shah

an Yes. how how we Gen science time, adopter a of we've seen, machine And large also of of the long you use and how learning, we've been aggressive [indiscernible], where price there, and have a for return adopter see we like, [indiscernible] personalization. very kind more been recent quickly. the kind with we the what advent do of do do you've that's sort cases AI, so of very But of lot things where data can you catalog, we

millions, of example, a For we of have catalog, items. millions very tens millions, large

development a And for of out lot to teams cost. so Those care we've are in we finding or of able the put to products on actually kind We've tools into type productivity dimension do auto merchandising able lot of of there increasing to things a a there value software at and attributes. agents They're that for them, correcting of coding. inaccuracies job. a And tagging our very create production. customer how driving insignificant our similarly, good be service empower been take copilot the and customer

things bunch a an aggressive adopter been we've there's So of been on.

I On of can prudent definitely some overinvesting, side, we're we small -- that really is actually what happy of we're and I shows also concepts We're with that we a And shop. we're actually making. investing. not that it's And selling think a I being much kind proof we're there, of of amazing one we're getting the certainly because change customer it. pilots do think we commodity I engagement. customer of think I'd and at but you're say we're things We're some category. how in But not about the traffic trying amount And pretty progress have have early. are we're basically it ignoring a It's also we're not how it goods. customers good think we -- in, do still we're setting position

the if of seller commodity are you're agents biggest And with items. I a think challenge

Walmart, to can [indiscernible] can out, at an Now Well, towels, agent say, agent Target, soap bounty is those it I it at that don't soap want care reorder door, have dish my hey, you for figure that hey, cheaper paper that does who's Plus I bars. shows make sense? up Amazon, of or kind So or we're order. brown execute ordering Walmart, automatically from whatever, Walmart at box cardboard signing up right? basically

you're experience provider. enhance is going item, little more pick The way real think really engaging. customer exclusive, consideration if -- lot the a of how fine a you're there's items. I right I between of things challenge lot not think different. agent if you can distinction items do But selling of the the you are there's that in different kind a is to role be to a that's of a commodity in it's And But there's

Operator

Your next question Oliver the from Wintermantel from of line comes Evercore.

Oliver Wintermantel

year? I talk fourth think positive the allocation cash to quarter. free Kate, bit to capital next about driving that you and mentioned flow the CapEx year. confirm then want is to expect be free forward invest Maybe this cash flow guys maybe Maybe flow cash how little in And into you're free a you you next you a the can year? what generation healthy looking

Kate Gulliver

Yes.

few thoughts. a So

relative cash typically fourth flow do quarter, in fourth first, the we to the quarter. just see So free positive

right? quarter third revenue nice fourth bigger fourth combination that the is the our a a working is quarter in cash and EBITDA that free adjusted typically capital So part seasonally, And drive with the reminder, in CapEx ongoing growth quarter. of As should around flow than dynamic, the discipline quarter.

over Obviously, sort what any past done we at of guidance. about we think given look as But XXXX year. I'd we've the CapEx, haven't

here. retail. with that network you've that we've then sort the on as there that PP&E There that on CapEx And structuring. Within quite nicely are in about in very come in And the today. is is where well. labor to so what piece. our thoughtful X [indiscernible] very really other and been logistics line is the of team and One is ongoing what we're disciplined the the and continue to is you've PP&E network we network, we've in our physical components seen seen is discipline line. out logistics break that the as spoken our And line pleased investment investment And

growth said spring, that also with the the to the results first intend intend from format disciplined CapEx there We're growth on not that There's about in what store network. opportunity. we're be really ample large for to physical mode excited about quite we're had the We expansion. maintenance very we've there. a in pleased have. And but about we then some that not So rollout is obviously it's there, on opened that side, capacity retail but that the we

seen year us you throughout this we maintain year, so expense P&L. that last you've CapEx And rigor discipline and from bringing the and as down should, overall, nicely up

Oliver Wintermantel

improvement? it how on Got it. maybe of next half to the in EBITDA looks of a year's improvement international about EBITDA positive versus first And XXXX, versus your that like then On that international, much the be nice had dollars year. is comment

Niraj Shah

Yes.

And the important the of drivers plays progress. over focusing the to think over over I'll to So each I'll -- progress of to business of then structure, kind of things streamlining on turn Kate seeing allowed for the really is with seeing years not make it for want as to X turn did then on that what key it Kate. that the our making business you're But work them think line pretty time are just time a each cost we line quick out, forward. comment happy I that drive and over we we're key to details. business in we're we guidance. we're the give really see a lot I'm

Kate Gulliver

and in global of sort and be as what as what business at not Inc. what where the to would looks we're about is thought for that That's I about nature we not we you Wayfair that, look reiterate said is across driving was, like we guidance. right? I overall started U.S. business, And sort restructuring But that specific you said, really give cost we we selective we the just invest am we're going areas which the that. to also across the business, and the cost of discipline of some on think focused what the the And how

Operator

over our Q&A time, to back here. interest And hand to of team in I like Wayfair will we the session would conclude the remarks. for closing

Niraj Shah

you, joining everybody, Thank today. Yes. for us

can with forward. I and have probably great pretty really we business, in a where and with are are for have things the out interest like the we're hope prospects Thanks looking coming, you Wayfair. excited now as rolling your we're that you the tell, -- we're we holiday we As pretty season.

Kate Gulliver

Thank you all.

Steven Conine

Thanks.

Operator

Enjoy conference today's call. your day. concludes This rest the of

You may now disconnect.

Wayfair (W) 1 Nov 242024 Q3 Earnings call transcript