Wayfair (NYSE:W) reported its Q3 result last week, with EPS of ($2.11) coming in worse than the Street estimate of ($2.05). Revenue was $2.8 billion, compared to the Street estimate of $2.82 billion.
According to the analysts at RBC Capital, they are encouraged that management is prioritizing cost-cutting/profitability but think stock price momentum will be difficult to come by until the macro environment improves.
The company plans to achieve approximately $500 million of cost savings in 2023 (60% related to headcount and 40% from operational initiatives), including almost 900 corporate jobs already eliminated. Additional initiatives include reducing spend on third-party labor and improving return processes/logistics.
The company guided Q4 revenue down a high-single-digit percentage and gross margin in the 28-29% range.