Boston — Cautious customer spending was reflected in Wayfair’s second quarter earnings, with total net revenue down 1.7% to $3.1 billion and U.S. net revenue off by 2% to $2.7 billion.
The primarily online home furnishings retailer did see its active customers rise for the quarter ended June 30, to 22 million, a 0.9% increase year-over-year. Repeat customer activity also grew, with 81.7% placing orders vs. 80.1% in the same quarter in 2023. Orders per customer inched up as well, landing at 1.85 from 1.82 a year ago.
“Q2 was a dynamic quarter that resulted in a period of share gain, amid continued macro headwinds that are pressuring the ways customers are shopping the category,” said Niraj Shah, CEO, co-founder and co-chairman. “Customers remain cautious in their spending on the home, and our credit card data suggests that the category correction now mirrors the magnitude of the peak to trough decline the home furnishing space experienced during the great financial crisis.”
Shah said despite economic uncertainty, the company booked its best quarter for adjusted EBITDA and free cash flow in the past three years, “clear evidence of our strict operating discipline. We are running the business with the goal of demonstrating substantial growth in profitability this year, even as the top line remains challenging.”
Non-GAAP adjusted EBITDA for the quarter was $163 million vs. $128 million in Q2 2023, and non-GAAP free cash flow was $183 million vs. $128 million.
The company’s international revenue increased by $1 million to $387 million, a 0.3% change year-over-year. Gross profit was $941 million, or about 30% of total net revenue.
In guidance for the third quarter, Kate Gulliver, chief financial officer and chief administrative officer, said during the company’s earnings call that Wayfair expects sales to be down in the low single digits, which fits with historical expectations, and gross margin to be at the low end of the 30% to 31% range.