Wayfair berichtet von Widerstandsfähigkeit im 3. Quartal trotz Marktgegenwinds von Investing.com.

We undertake no obligation to update these statements as a result of new information or future events. Additionally, during this call, we will refer to non-GAAP financial measures, such as adjusted EBITDA. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in our earnings release, which is available on our Investor Relations website. With that, I’ll turn the call over to Niraj for his opening remarks.

Niraj Shah: Thank you, James, and good morning, everyone. Despite the challenging economic environment, I am pleased to report that Wayfair maintained a mid-single digit adjusted EBITDA margin for the second consecutive quarter, with year-over-year improvements nearing $100 million. This achievement is a testament to our team’s focus on cost efficiency and profitability as we navigate through the downturn.

We launched Wayfair Rewards, a loyalty program aimed at increasing customer shopping frequency. We also continued to invest in our marketing strategy, particularly influencer marketing, which is showing promising returns in customer engagement. Additionally, we are prioritizing operational efficiency and technological advancements, such as machine learning and AI, to enhance the customer experience.

While we anticipate a continued slowdown in the housing market, we remain focused on capturing market share and driving profitability. Our Q4 revenue is expected to decline in the low single-digit range, with adjusted EBITDA margins projected between 2% and 4%. Looking ahead to 2025, we are targeting higher EBITDA than in 2024, driven by market share gains and cost discipline.

Overall, I am confident in Wayfair’s ability to navigate through these challenging times and emerge stronger on the other side. Thank you for your continued support, and I look forward to your questions during the Q&A session.

Operator: Thank you, Niraj. [Operator Instructions] Our first question comes from the line of [Analyst Name] with [Investment Firm]. Please proceed with your question.

[Analyst Name]: Thank you for taking my question. I wanted to ask about the impact of the upcoming election on consumer spending and your advertising strategy. Can you provide some insights into how you are navigating through this period?

Niraj Shah: Thank you for your question. We are closely monitoring the pre-election dynamics and potential shifts in consumer behavior. We are taking a cautious approach to ad spend, especially given the high advertising rates during this period. Our focus remains on driving efficiency and effectiveness in our marketing efforts, while also adapting to any changes in consumer sentiment. We believe that our strategic investments in technology and marketing will position us well for future growth opportunities.

Operator: Thank you. Our next question comes from [Analyst Name] with [Investment Firm]. Please proceed with your question.

[Analyst Name]: Thank you for taking my question. I wanted to inquire about your international business and the improvements in EBITDA that you mentioned. Can you provide more details on the trajectory of your international operations?

Niraj Shah: Our international business has shown positive momentum in terms of EBITDA improvements. We are pleased with the progress we have made in expanding our presence globally and capturing market share in key regions. We will continue to focus on driving operational efficiency and customer loyalty in our international markets to drive further growth in this segment.

Operator: Thank you. We have time for one more question. Our final question comes from [Analyst Name] with [Investment Firm]. Please proceed with your question.

[Analyst Name]: Thank you for taking my question. I wanted to ask about your cash position and free cash flow expectations for Q4. Can you provide some insights into your liquidity and capital management strategies?

Kate Gulliver: Thank you for your question. We ended the quarter with $1.3 billion in cash and equivalents, providing us with a strong liquidity position. We expect positive free cash flow in Q4, driven by seasonal revenue increases and disciplined capital expenditure management. Our focus remains on maintaining a healthy balance sheet and optimizing our capital allocation strategies to support our long-term growth objectives.

Operator: Thank you. This concludes our Q&A session. I will now turn the call back to James for closing remarks.

James Lamb: Thank you all for joining us today. We appreciate your continued interest in Wayfair. If you have any further questions, please feel free to reach out to our Investor Relations team. Have a great day.

Operator: This concludes today’s conference call. You may now disconnect.

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In conclusion, we are pleased with the progress we have made in driving cost efficiency and spending discipline, as well as in launching initiatives to drive mind share and frequency among our customers. We remain optimistic about the long-term growth opportunities in the home category, despite the current challenges in the macro environment. We are confident that our strategic focus and continued investments will position us well to capture market share and drive profitability when the category does return to growth. Thank you for your continued support, and we look forward to updating you on our progress in the quarters to come.

Despite the slight decline in net revenue, our gross profit margin improved by 30 basis points year-over-year to 25.7%, driven by higher margin categories and efficiencies in our supply chain. This improvement in gross margin is a testament to our ongoing efforts to optimize our product mix and improve operational efficiencies.

Operating expenses increased by 4% year-over-year, primarily driven by investments in marketing and technology to support our growth initiatives. Our adjusted EBITDA margin came in at 2.8%, slightly below our expectations due to higher-than-anticipated marketing spend.

Looking ahead, we remain confident in our ability to drive long-term profitable growth. We continue to see strong customer engagement and repeat purchase rates, which bodes well for our future performance. Our investments in marketing, technology, and customer experience are paying off, and we are excited about the potential of initiatives like Wayfair Rewards and influencer marketing to drive further growth.

In conclusion, we are pleased with our performance in Q3 and remain focused on executing our strategic initiatives to drive sustainable, profitable growth. Thank you for your continued support, and we look forward to updating you on our progress in the coming quarters. Thank you. This will allow us to focus our cash on driving growth and further investing in the business. Looking ahead, we are confident in our ability to continue executing on our strategic initiatives and delivering strong financial results. We remain committed to driving long-term shareholder value and are excited about the opportunities that lie ahead. Thank you for your continued support and confidence in Wayfair.“

We are also focused on improving the customer experience, expanding our product assortment, enhancing our logistics and delivery capabilities, and investing in marketing and advertising to drive brand awareness and customer acquisition. All of these efforts have contributed to our share gains in the market.

As for our 2025 EBITDA commentary, we remain confident in our ability to drive mid-teens incremental EBITDA margins. This confidence is based on our continued focus on cost efficiency, operational excellence, and strategic investments in areas that we believe will drive long-term growth and profitability. While the market environment may present challenges, we are well-positioned to navigate them and continue to execute against our long-term strategy.

Overall, we are excited about the opportunities ahead and believe that the best is yet to come for Wayfair. Thank you for your questions.

Kate Gulliver: Yeah, that’s a fair point. I think what I would say is, we’re seeing some continued investment in the business, which is part of the reason why we’re not quite hitting that mid-single digits in the fourth quarter. But we do believe that we are on track to achieve that goal in the near future as we continue to optimize our cost structure and drive efficiencies in our operations. So while we may not hit it in the fourth quarter, we are confident that we are moving in the right direction towards that target. Peter Keith: Great, thank you for that explanation. It’s good to hear about the learnings from MyWay and how you’re applying that to the new loyalty program. It sounds like you have a solid plan in place. And it’s encouraging to hear that you’re seeing positive reactions from customers. Thank you for the insights.

So we’re really excited about both how the customer perceives this value prop and what it can do for us.

Peter Keith: Very good. Thank you so much.

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

Simeon Gutman: Hi. Good morning. A couple of questions first. On the category, home furnishing, if turnover or housing turnover picks up, I think the category would rebound. If it doesn’t, curious, what you think about pent-up demand to drive — is that going to drive some life in the category? Where do you think we are in that continuum?

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Niraj Shah: Yeah. So I think you kind of — you’re phrasing it well in the sense that obviously, if housing demand and existing home sales picks up, that’s obviously highly stimulative to the category. We are seeing signs that there is pent-up demand, but how much time needs to elapse before that becomes top of mind enough to be stimulative on its own is less clear, I would say. This is why — just thinking about our strategy we’ve had for two years during which the market has gone down, what, 25%, but we’ve basically been able to take significant market share. And so we are doing far better than that. I think our strategy is really not counting on a rebound in the category, but it’s actually calling out the fact that use rough numbers. The category was whatever, a little over $400 billion in North America and now it’s whatever, over $300 billion in North America, it’s still $300, whatever plus billion of spend that’s out there. And we think that there’s a lot of argument on why we can take share very nicely with all the things we’re doing. And if you kind of think about that as being a long tail, very fragmented and you’re increasingly seeing players who are having a harder time being differentiated in the middle, sort of losing share or going away. You’ve kind of seen that from major players where they’re declining a lot or there’ve been a handful — most recently [indiscernible] going out of business. And so there’s definitely things that are changing. And I think this is the real opportunity for us. And yes, of course, when the category turns, there’s going to be tremendous amount of growth, too. But it’s sort of like, timing that I don’t think it’s very easy to do, and I don’t think it’s really pertinent with given the strategy we have.

Simeon Gutman: And then a follow-up on just the construct for ’25, which I know once you give a construct, we’re going to ask all sorts of questions. There’s obviously a lot of room when you say EBITDA dollars north of 2024. The question is, you could, let’s say, that’s up a couple of hundred million dollars or are you going to lean in to market share to the point where you’ll just drive a modest outcome? And I’m not looking at dollars and how much it will be up year-over-year, but more on your posture of how much you want to lean in to take market share to just achieve that goal of growing them or actually taking market share in a more meaningful way, if that’s the essence of the question?

Niraj Shah: Yeah. The only thing I’ll say, and I’m going to turn it over to Kate too, is that those are interrelated meaning that the things you do to take market share, some of those do not have costs associated with it that’s not really something, but for example, I’ve a storefront experience. That’s a team of people we have on payroll. They’re doing hard work every day, rolling out a lot of features, that will have an outcome that will drive market share. There’s no incremental cost. The ongoing payroll is the cost there. There’s other things you would do, like if you talk about advertising, you have a cost associated with revenue. But what we’re seeing is, we’re going to do the costs associated with profit dollars that it generates. So those who have a very direct relationship. They’re not unrelated. But let me turn it over to Kate for any clarification.

Kate Gulliver: Hey, Simeon. Yeah. I would just reiterate, we are very focused on driving both the top and the bottom line. And we believe that we can do these things in concert with each other, and we have a high degree of conviction around that. So, what you’re hearing us say is there are select places where we have made investments and are making investments. You obviously — last quarter, we started to talk about that in the gross margin line. You saw how that showed up this quarter. We talked a little bit about the marketing spend. We are doing these things because we think that they drive incremental order growth and revenue capture. And ultimately, that drives adjusted EBITDA dollars growth. And we can do that while continuing to be quite disciplined on the cost side, and you’ve seen that pan out over the last few years as well. Niraj already mentioned that SOTG&A expense, we’ve taken that down nine quarters in a row. On an LTM basis, that’s down over $250 million. That’s on top of the cost takeout that we took out at the end of ‘22 and throughout ‘23. So you’re seeing really nice discipline there where we can manage the fixed cost and you’re seeing us say, hey, there are some places where we think there are pockets of opportunity to invest that will drive on a multi-quarter basis, revenue, gross profit dollars and ultimately adjusted EBITDA dollars.

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Simeon Gutman: Okay. Thank you. Good luck.

Operator: Your next question comes from the line of Brian Nagel from Oppenheimer. Please go ahead.

Brian Nagel: Hi. Good morning. So I have a couple of questions. My first question on market share. So I know this has been a big topic, and you’ve highlighted consistently the numbers show that clearly, Wayfair in a tough environment is taking market share broadly.

Niraj Shah: Sure, go ahead.

Curtis Nagle: So just curious, given the inflationary environment and potential for continued supply chain disruptions, how are you thinking about tariffs and any potential impact they could have on your business going forward?

Niraj Shah: Yeah, I mean, tariffs are always something that we keep an eye on and monitor closely. We have a team that’s dedicated to that. But I would say that our business model is fairly resilient to potential tariff impacts. We have a diverse supplier base, we have a global footprint, and we have the ability to adjust pricing and sourcing strategies as needed to mitigate any potential tariff impacts. So while it’s something we’re aware of and monitoring, we feel confident in our ability to navigate any challenges that may arise in that area.

And so, we’re always looking at how we can leverage new technologies to improve the customer experience and drive efficiency in our operations. We see these initiatives as critical to our long-term success and are constantly experimenting with new tools and techniques to stay ahead of the curve. While we may not see immediate impacts on metrics like time spent or browsing, we believe that investing in these technologies will pay off in the long run by creating a more personalized and efficient shopping experience for our customers. But I will say that we have been pleased with the improvement in our international segment’s EBITDA compared to the first half of the year. We have been focusing on streamlining our cost structure and driving progress in key areas for each business line. As we continue to execute on our strategy, we expect to see positive EBITDA growth in our international segment next year. Aber ich wiederhole, was Sie gesagt haben, nämlich dass wir bei der Überlegung zur Kostendisziplin und den selektiven Bereichen, in die wir im gesamten Geschäft investieren, nicht nur auf die USA beschränkt sind. Wir haben gesagt, dass wir mit einigen Kostenrestrukturierungen begonnen haben, die globaler Natur sein würden und wie wir das betrachten. Wenn wir über das nachdenken, was wir für das Geschäft vorantreiben, konzentrieren wir uns wirklich auf das Geschäft insgesamt und wie das bei Wayfair Inc. aussieht.

Operator: Und im Interesse der Zeit werden wir unsere Fragerunde hier beenden. Ich möchte das Wort zurück an das Wayfair-Team für abschließende Bemerkungen übergeben.

Niraj Shah: Ja. Vielen Dank, dass Sie heute alle dabei waren. Wie Sie wahrscheinlich erkennen können, sind wir ziemlich begeistert von der aktuellen Situation des Unternehmens, den sich entwickelnden und kommenden Dingen, und wir mögen die Aussichten, die wir haben, während wir nach vorne blicken. Vielen Dank für Ihr Interesse an Wayfair. Ich hoffe, Sie haben eine tolle Urlaubssaison.

Kate Gulliver: Vielen Dank an alle.

Steve Conine: Danke.

Operator: Damit endet die heutige Telefonkonferenz. Genießen Sie den Rest Ihres Tages. Sie können jetzt auflegen.

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