With Americans spending more time at home than ever before, furnishing home offices and upgrading living rooms has become a top priority for shelter-in-place shoppers.
And that has been great news for Wayfair (NYSE:W).
Wayfair is a relatively young home decor and online furniture store. It’s like the Amazon of furniture and home accessories, connecting shoppers to over 18 million products. Since COVID-19 struck, shares at the company have skyrocketed.
Quarantine was a great time to be in the online furniture game for companies with their digital marketplace in order. While the doors of Ikea and Raymour & Flanigan were shut because of stay-at-home orders, Wayfair remained open for business.
In May, Wayfair announced first-quarter sales grew almost 20% from a year earlier, and shares soared. The stock has been trending higher ever since.
On Monday, Wayfair shares hit a 52-week high of $200.28. Shares are up 112% since January, as of Tuesday’s close. They opened Wednesday morning $9.28, or 4.8%, to $201.24.
In 2019, Wayfair generated more than $9 billion in annual sales. But the company also lost almost $1 billion that year.
Wayfair is burning through profits to speed up growth. In 2019, the company spent over $1 billion on advertising alone. Some investors remain skeptical of Wayfair’s path to profitability.
Observers are keen to learn whether W wil finally report a profit, and whether it can thrive after shelter-in-place orders are lifted and its rivals’ doors are open again.
