Wayfair Inc (NYSE:W, NYSE:) will likely report “challenged” results in 4Q as macro headwinds continue to impact consumer spending, Canaccord analysts said ahead of the furniture company’s latest earnings release.
But there are a few bright spots to consider: the firm saw strong demand during the “Cyber Five” period of Thanksgiving through to Cyber Monday, Canaccord noted.
Moreover, November year-over-year revenue trends improved relative to the down 10% quarter-to-date results management revealed on the 3Q earnings call, according to analysts.
READ: Wayfair shares bounce as the home goods retailer moves to slash 10% of its workforce
Improving revenue through the month of December and a 10% reduction in headcount announced in January 2023 also bode well for Wayfair’s outlook, analysts noted.
“With the share price having increased meaningfully in recent weeks on these improving trends and expense reductions, and with Amazon forewarning of continued eCommerce softness, we suggest some short-term caution heading into the print but expect top-line trends to improve throughout the year and see a more definitive timeline for positive free cash flow as a potential catalyst,” Canaccord analysts wrote.
Consensus revenue estimates for Wayfair’s 4Q to end December 31, 2022, come in at around $3.07 billion with a loss of $72 million expected, according to Canaccord and Factset data.
Canaccord has a 'Buy' rating and a $65 price target on Wayfair stock, which had fallen around 7% on Tuesday afternoon to reach $47.95.
Contact Angela at angela@proactiveinvestors.com
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