Wayfair stock plunges as online sales fall

Online retailer Wayfair saw its stock price tumble on Thursday amid a market rout, particularly among e-commerce businesses.

Shares of the Boston-based company fell 26% to close at $67.45 after reporting first-quarter results that fell short of analysts’ expectations. Shares have lost 74% in the past six months.

The sharp drop came amid a broader market decline for most tech stocks. Boston cybersecurity company Rapid7 lost 17% as its earnings report also disappointed analysts, while software company HubSpot fell 13% and DraftKings lost 8%.

Wayfair was one of the biggest beneficiaries of changing consumer behavior during the pandemic shutdowns as more people shopped online and spent more money on household items. But since the lockdowns eased, sales at Wayfair and other online sellers including Etsy, eBay and Amazon have declined.

In the first quarter, Wayfair’s sales totaled $3 billion, down 14% from the same period a year ago. The company reported a net loss of $319 million, or $3.04 per share. A year earlier, Wayfair had made a profit of $18 million, or 18 cents per share.

Analysts were concerned that Wayfair did not appear to retain all of the customers it attracted – at great expense – during the shutdowns. With 25.4 million active customers at the end of March, Wayfair lost about a quarter of its customer base compared to the previous year.

Wayfair does not manufacture any of the furniture it sells and its suppliers have faced long delays, noted analyst Kenneth Leon of CFRA Research. “Buyers and potential customers are frustrated that they cannot get the goods on time or at all on [Wayfair’s] platform,” Leon said.

Chief executive and co-founder Niraj Shah tried to calm investors about the company’s mounting losses in a statement accompanying the results.

“We have complete confidence in the structural economics of our business based on the investments we have made and the key drivers that should drive profitability higher over time,” Shah said.

Shares of rival online retailers also fell on Thursday. Etsy’s stock price fell 17%, eBay 11% and Amazon 8%.

Wayfair also announced Thursday that chief financial officer Michael Fleisher plans to retire. The current director of human resources, Kate Gulliver, will take up her duties from November.


Aaron Pressman can be contacted at aaron.pressman@globe.com. Follow him on Twitter @ampressman.



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David A. Albanese