US furniture company Wayfair reported a surge in its business as more people are now decorating their homes and home offices amid the ongoing stay-at-home orders and lockdowns. Following its announcement, the company's share prices had surged by more than 37 percent Monday.
Wayfair revealed in a press release that is gross revenue growth in March had reached close to 20 percent, a similar trend it had witnessed during January and February. According to the company, the growth was more than double what it had recorded over the same period last year. It added that the trend seemed to be persisting and that it is expecting more or less the same amount of growth for April.
Given the continually rising confirmed cases in the US, now exceeding 360,000, much of the country has now chosen to live a stay-at-home lifestyle to limit the spread of the virus. Most people are now working or learning from home through online portals and video conferencing platforms as schools and offices remain closed.
During this time, consumers are now sprucing up their home offices, buying furniture such as desks and chairs online. Wayfair and its online platform has become the retailer of choice for most amid the closure of traditional brick-and-mortar furniture outlets.
Wayfair CEO, Niraj Shah, mentioned in the press release that the company's business and its e-commerce model is uniquely suiting to serving customers at these very challenging times. The executive added that the surge in its sales has reinvigorated the company and its commitment to shareholders to reach profitability and achieve positive cash flow.
Given its sales momentum, Wayfair stated that it expects to either meet or exceed its previous revenue forecast for the first quarter of this year of up to 17 percent. The company added that it is doubling up on its efforts to reach profitability quicker than initially planned and will outline those strategies during its earnings report in May.
Similar to other online startups, Wayfair is currently still struggling to become profitable. The company has been criticized for spending too much money on advertising and acquiring new customers. Since it had gone public in 2014, the company has yet to report a profit. Its quarterly losses have also continually increased over the past couple of years, reducing investor confidence.
Industry experts have stated that the massive surge in online sales was inevitable given the current situation. Before the pandemic, online sales only accounted for about 14 percent of total furniture sales in the country. With brick-and-mortar outlets closed, online retailers such as Wayfair are expected to experience an influx of customers.
However, once the pandemic ends, the majority of the supply will undoubtedly return. This raises the question of whether or not the company can maintain its momentum to reach profitability or return to reporting losses.
