Wayfair, the online furniture retailer, recently posted its first profitable quarter since it went public in 2014.
The company’s total net revenue increased $2 billion year over year, with a gross profit of $1.3 billion.
Like with other businesses, online ordering has skyrocketed during the pandemic. Wayfair reports nearly 19 million orders delivered in the second quarter of 2020, a staggering 106 percent increase over that same period last year.
“The second quarter was a very strong period for Wayfair,” said Niraj Shah, CEO of Wayfair. “Our strategic long-term investments positioned us well to serve our customers and to quickly adapt during a challenging time. We experienced unprecedented demand in Q2 and saw record numbers of new and repeat customers choose Wayfair.”
Niraj noted that Wayfair took a turn this past quarter. Previously, the home furnishing retailer received more orders from repeat customers. In the second quarter of this year, the company saw new customer orders surpass repeats. According to Business Insider, Wayfair has an active customer base of 26 million.
With people confined to their homes, it seemed inevitable for consumers to focus on home improvement, and Wayfair benefited substantially. But the company is still wary of the uncertainty surrounding the pandemic.
“We have reason to believe that customers will remain focused on their homes in the back half of the year,” CFO Michael Fleisher said during the call. “But the unemployment picture is still quite tenuous.”
News of Wayfair’s earnings success has reflected in its stock price, which quickly rose to $300 per share, its highest ever. Several factors contributed to its success beyond customers stuck at home.
“Wayfair benefited from high demand for home category products, closures of brick-and-mortar competitors, favorable product pricing, and relatively cheap online advertising,” Baird analyst Colin Sebastian wrote in a note to clients.
Still, the average order value fell to $227, down from $255 during the second quarter last year. Whether the company can keep up the success throughout and after the pandemic remains to be seen.
For now, the outlook for the economy as a whole may be an indicator. Consumer spending rebounded nearly 6 percent last quarter, and unemployment applications reached their lowest level since the pandemic started.