Wayfair CEO Compares Sales Drop to 2008 Crisis

Online home goods retailer Wayfair has reported a decline in sales during its fiscal second quarter, with CEO Niraj Shah describing the current downturn in the home goods sector as "unprecedented." He compared the situation to the significant decline experienced during the 2008 financial crisis, noting that credit card data indicates a nearly 25% drop from the peak in the fourth quarter of 2021. Sales fell to $3.12 billion, a decrease of about 2% from $3.17 billion a year earlier, while the company posted a loss of $46 million, or 41 cents per share, slightly better than the same quarter last year. The sluggish demand for home goods has been attributed to a stagnant housing market and high interest rates, which have led consumers to prioritize spending on experiences and other discretionary items over home furnishings. Wayfair's Chief Financial Officer, Kate Gulliver, emphasized that the current correction in the home goods category resembles a recession-like scenario, despite the country not being in a technical GDP recession. In response to the challenging market conditions, Wayfair has undertaken significant layoffs to align its cost structure with its business size. Despite these struggles, the company reported its best quarter for free cash flow generation and adjusted EBITDA in three years, achieving an adjusted EBITDA of $163 million, though still falling short of Wall Street's expectations of $168 million. Shah expressed optimism for a potential turnaround, indicating that Wayfair is well-positioned to benefit as the market stabilizes.