Wayfair drops sales in the second quarter and loses customers

Wayfair Inc. reported broad declines in its business in Thursday’s second-quarter results.

The Boston-based company said second-quarter revenue fell 14.9%, resulting in a net loss of $378 million at the end of the quarter on June 30.

The Wayfair Inc. website on a laid out laptop in Saint Thomas, Virgin Islands, U.S. on Thursday, February 18, 2021. | Getty Images

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Active customers reached 23.6 million, down 24%. And orders delivered in the second quarter fell 28% to 10 million. Repeat customers placed 7.8 million orders, down 26%.

Wayfair shares fell 2.44% to 62.87 on trading today.

“In a challenging macro environment, we remain steadfastly focused on our customers and suppliers, and ensuring Wayfair is their preferred platform for the home,” CEO, Co-Founder and Co-Chairman Niraj Shah wrote in Wayfair’s earnings release. “We are tightly controlling our many levers and leading Wayfair in a fiscally responsible manner throughout this period.”

Wayfair has laid off 550 employees worldwide, including 350 in Boston, as its chief executive acknowledged the Boston-based company had grown too quickly and become less efficient as its meteoric sales growth showed signs of slowing . (David L. Ryan/The Boston Globe via Getty Images/Getty Images)

The home retailer runs a variety of websites with decor and appliances offering a number of different styles and price points. In addition to Wayfair.com, the company also operates Birch Lane, Joss & Main and Perigold.

Wayfair’s issue may affect many online stores. Overstock.com, Wayfair’s competitor, also faced a revenue slump, with revenue down 33.5% year-on-year.

E-commerce stores are struggling to rekindle early shopping habits from the pandemic, when shoppers invested in new sofas, beds and decor due to long periods at home. Today, customers have been dealing with high inflation for 40 years.

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“Customers are more deliberate about where their discretionary dollars go, as prices at the gas station and grocery store consume a greater share of [their] wallet,” Shah wrote. “We’ve also seen a lot of those discretionary dollars shift from goods to services, especially travel.”

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In that year, shares of Wayfair have plunged more than 60%. Shares of RH lost 45% and Bed Bath & Beyond is down 57%. Williams-Sonoma, which also includes West Elm and Pottery Barn, fell 13%.