MarketPulse: Wayfair Hits Record High as Results Top Expectations
Wayfair shares hit a record high Friday as the online home furnishings company topped expectations on both the top and bottom lines.Wayfair (NYSE:W) reported a loss of $1.12 a share on revenue of $1.99 billion, ahead of estimates from Investing.com for a loss of $1.30 on revenue of $1.97 billion. Its share price rose 29% to a record intraday high of $151.40.The upbeat results were supported by strength in the company's direct retail business as sales grew sharply on the back of a 38% surge in active customers to 15.2 million for the year."Direct retail increased 41% year over year to $1.20 billion, above our 38% estimate and the high-end of the guided range of 34%-37%," Stifel said in a note.The company pledged to press ahead with plans to invest in infrastructure as it seeks to take greater control of its inbound supply, a move analysts estimate will weigh on earnings in the coming years."With more investments in technology and logistics/fulfillment, as well as international and category expansion, we widen '19 loss per share estimate by $1.13 to $4.37 and set '20 loss at $3.22," said CFRA, an independent research provider.The road to more growth in the U.S. is seemingly paved with headwinds as home improvement spending looks set to moderate."NAHB estimates that real spending on home improvements will continue to grow, but at a slow place of about 1.6% in 2019," said Danushka Nanayakkara-Skillington, National Association of Home Builders' assistant vice president for forecasting and analysis. "Factors prohibiting stronger growth include the ongoing labor shortage and rising material prices."Wayfair's above-consensus results arrived ahead of fourth-quarter results from home improvement retailers Home Depot (NYSE:HD) and Lowe’s(NYSE:LOW) due Tuesday and Wednesday, respectively.