NEWSLETTER
Wayfair (W) He has had challenging years, like many other home products retailers throughout the country.
As housing prices in the United States maintain high, and the housing billing rate remains the lowest in 30 years, with an average mortgage rate of 30 years above 6%, consumers They have depressed the expense of home goods, especially in large discretionary housing projects such as kitchen and bath remodeling.
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“The domestic goods industry is inherently cyclical, but in recent years they have been particularly volatile,” Wayfair said in a recent letter to shareholders. “A confluence of macroeconomic factors (changes in discretionary spending after pandemic, supply chain interruptions and historically high mortgage rates) have significantly affected the real estate market and, in turn, our category.”
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Wayfair suffers steep losses during the Christmas season
In the Wayfair quarter -quarter profit report by 2024, the retailer revealed that in the midst of these recent challenges, his total net income increased only 0.2% year after year during the quarter. He also faced a net loss of $ 492 million.
Even during a bustling holiday season last year, Wayfair saw the number of orders that their usual customers made during that period of time decrease by 5.6% year after year.
The number of its active customers also fell by 4.5% compared to the same period of time last year, not reaching analysts estimates.
Despite these decreases, the average amount of money spent per order was $ 290, which is $ 11 higher than the average amount they spent during the same quarter in 2023.
The drastic change in customer behavior occurs after Wayfair presented its new Wayfair Rewards program, which launched On October 22. The program encourages customers to make more than three purchases per year.
The program costs $ 29 annually, and gives customers access to benefits, such as 5% of purchases, free shipping in all orders, access to exclusive purchase events, special offers and a support line only for Members.
Related: Wayfair hopes to recover customers with a new offer in low sales.
During a profit call on February 20, the Wayfair CEO, Niraj Shah, said the “is expected” program, but the company will announce it rather.
“We have received its records at a pleasant pace, but we have not yet marketed aggressively,” Shah said. “So what are you going to see is that you will see it on the highlight more.”
Wayfair's move occurs after some of its clients in recent years have complained about finding inflated prices for articles on the company's website. Therefore, it is not surprising that Wayfair trusts his new rewards program, which focuses on the affordability, to attract more customers.
Shortly after the company revealed its last profits on February 20, its shares fell approximately 3%. Wayfair shares have currently dropped approximately 9%.
Wayfair is not the only victim of low sales
Wayfair is not the only retailer of home products that has recently been fighting sales. The company's main competitors, Lowe's and Home Depot, have also marked that their customers have become more cautious when spending money on their stores.
In the Lowe Third Quarter Income Report by 2024, which was published in November, the retailer revealed that its total sales during the quarter decreased by almost 1.5% year after year.
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During a profit call on November 19, Lowe CEO, Marvin Ellison, said that, although interest rates have recently decreased, consumers continue to face other economic pressures that make them cling to their cash.
“While interest rates are beginning to decrease, consumers continue to face affordable challenges since both inflation and interest rates are pressing their wallet,” Ellison said.
In the Profit Report of the Third Quarter of Home Depot by 2024, the retailer revealed that his comparable sales in the United States decreased 1.2% year after year during the quarter. In addition, the average amount of money that customers spent for each purchase were reduced by almost 1%.
“The number one problem that people quoted in our surveys was the macroeconomic and even political uncertain uncertainty,” said Home Depot director, Richard McPhail, during a earning call in November.
It is expected that both Lowe's and Home Depot denounce their earnings from the fourth quarter next week.
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