Traditional retail businesses have been sent into a tailspin due to the coronavirus pandemic, but that has come as a boon for e-commerce business. That was further underlined in the first quarter performance of online furniture retailer Wayfair Inc (NYSE:W). The stock surged on Tuesday after the company recorded a year on year rise of 20% in its sales, and that was a direct consequence of higher traffic to its website due to the widespread lockdowns.
Spending on home office furniture rose for hundreds of thousands of people are now working from home. While the net losses widened, the rise in sales triggered a 23.7% surge in the stock price.
The Chief Executive Officer of Wayfair, Niraj Shah, told analysts that customers are becoming more and more conscious about the sort of furniture they buy for their homes. That has been a major factor behind the surge in sales. He went on to state that Wayfair has a track record of performing better than its competitors during an economic downturn, and that is something that investors need to keep in mind. Revenues for the first quarter stood at $2.33 billion, and the adjusted loss per share came in at $2.30.
While the sales rose, the company’s losses for the period deepened to $285.87 million, which reflects a significant rise from the $200.39 million worth of losses it had recorded in the prior-year period. That being said, it should be noted that analysts had expected Wayfair to generate losses of $2.60 per share for the period.
During the first quarter, Wayfair completed as many as 9.9 million orders, and that reflects a rise of as much as 21% from the year-ago period. It also highlights some of the competitive advantages that the company has built up over its peers over the course of the past twenty years. More importantly, repeat customers placed a total of 6.9 million orders.