Shares of the online furniture retailer, Wayfair, fell as much as 12% on Thursday over high costs and widening losses, even though the company clocked double-digit growth in revenue for the first quarter of 2019.
Revenue rose 39% to $1.94 billion in Q1 versus an estimated $1.92 billion. However, losses widened to $200.4 million, that is, $2.20 per share, from $107.8 million, or $1.22 a share, during the same period a year ago. The company also saw 16.4 million active customers in the first quarter, a rise of 39% from the previous year’s quarter.
Despite the growth in the number of repeat customers and rise in the average order value to $237 in Q1, the company is still struggling with expenses that are putting pressure on the bottom line.
The company has also initiated a number of investments that include logistics infrastructure, new product offerings and efforts to acquire new customers. In the first quarter, customer acquisition costs stood at $88 per customer.
Analysts have been highlighting that while the Boston-based retailer has mastered the art of selling furniture online, it is still weak in garnering profits.
Despite Thursday’s vast sell-off, Wayfair’s stock, which is valued at $13.3 billion, has climbed 61% this year and in the past 12 months, it has surged more than 95%.