Wayfair Set to Report Q1 Earnings: What's in the Cards for the Stock?

Wayfair W is scheduled to report first-quarter 2025 results on May 1.

W expects revenues between flat and slightly negative on a year-over-year basis. The Zacks Consensus Estimate for first-quarter 2025 revenues is pegged at $2.71 billion, suggesting a 0.66% year-over-year decline.

The consensus mark for the first-quarter 2025 bottom line is pegged at a loss of 18 cents per share, which has narrowed by 1 cent over the past 30 days. This also marks a sharp improvement from the year-ago quarter's loss of 32 cents.

Wayfair has a mixed earnings surprise history. The company’s earnings missed the Zacks Consensus Estimate in two of the trailing four quarters and beat the other two, the average negative surprise being 320.11%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Wayfair Inc. Price and EPS Surprise

 

Wayfair Inc. price-eps-surprise | Wayfair Inc. Quote

Let us see how things have shaped up for the upcoming announcement.

Key Factors to Note for W’s Q1

Wayfair’s proprietary CastleGate fulfillment network has been gaining momentum, supported by the growing demand for faster delivery and enhanced customer experiences. Approximately 90% of CastleGate orders now feature a "speed badge," enabling quicker delivery times, reducing return rates and driving higher customer satisfaction. Notably, one-day delivery options have lifted supplier conversion rates by more than 60%. These operational enhancements are expected to have contributed meaningfully to Wayfair’s performance in the first quarter of 2025.

W expanded its advertising investments in the fourth quarter of 2024 and carried that momentum into early 2025, with a clear focus on high-ROI channels. These targeted efforts were designed to maximize return on spend by accelerating customer acquisition and stimulating order volume. Given the multi-quarter impact of such spend and early signals of improved engagement, Wayfair is likely to have seen positive contributions from these investments in the to-be-reported quarter.

However, Wayfair’s strategic exit from the German market in late 2024, driven by persistent challenges in scaling market share and achieving sustainable unit economics, is expected to have negatively impacted first-quarter 2025 revenues by 100 basis points. The move likely served as a short-term headwind to the overall top-line performance.

What Our Model Says

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is the exact case here.

Wayfair currently has an Earnings ESP of +7.88% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Other Stocks to Consider

Here are some other companies worth considering, as our model shows that these also have the right combination of elements to beat on earnings in their upcoming releases:

Alibaba BABA presently has an Earnings ESP of +41.69% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for fourth-quarter fiscal 2025 earnings is pegged at $1.48 per share, up 8% over the past 30 days and indicating year-over-year growth of 5.71%.

Carvana CVNA has an Earnings ESP of +19.45% and a Zacks Rank #2 at present.

The Zacks Consensus Estimate for first-quarter 2025 earnings is pegged at 73 cents per share, up 5.8% over the past 30 days and suggesting year-over-year growth of 278.05%.

On Holding ONON has an Earnings ESP of +12.50% and a Zacks Rank #2 at present.

The Zacks Consensus Estimate for first-quarter 2025 earnings is pegged at 24 cents per share, unchanged over the past 30 days and implying a year-over-year decline of 36.84%.

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research