Wayfair Looks to Find its Way in 2023

Key Takeaways:

• In 4Q22, Wayfair saw an inflection in reported active customer growth and ST MAU growth, which fell 18% and 21% YoY, respectively, an improvement from the prior three quarters. Reported orders delivered (11mn) were flat YoY, after seven consecutive quarters of slowing growth, and trending upward similar to ST’s YoY download growth (see chart below)

  • Wayfair’s sales over Black Friday weekend rose low-single digits YoY, with 73% of holiday orders from repeat customers, highlighting customer loyalty. Per ST estimates, Wayfair’s downloads on Black Friday and Cyber Monday were up 36% and 39% YoY, respectively, and while MAU growth fell 19% and 21% YoY, respectively, over the same period, this was a recovery from 2021

• Weakness in the UK, Germany and Canada, its main markets outside of the US, have dragged Wayfair’s topline (~14% of total revenue) and profitability; the international segment’s 4Q22 adjusted Ebitda margin of -20% follows eight quarters of losses, offsetting positive US adjusted Ebitda margin of 0.4%

  • Downloads in the UK, Germany and Canada were down 43%, 56% and 2% YoY in FY2022, respectively, while the US grew 28% YoY

  • The shift of spending away from retail to experiences, such as travel, has negatively impacted active user trends across the globe, with MAU growth falling 29%, 30%, 31% and 29% in the US, UK, Germany and Canada, respectively, in FY2022

• Global trends in Jan’23 remained positive, with Wayfair’s download and MAU growth jumping 34% and 14% MoM, respectively, a significant acceleration from the last eleven months, per ST estimates; however, international performance remains weak with little sign of recovery

For more information, request the full report from reports@sensortower.com.