Wayfair Inc. 2020 Q1 - Results - Earnings Call Presentation

The following slide deck was published by Wayfair Inc. in conjunction with their 2020 Q1 earnings call.

Comments

[Value Digger]

Big Lots (BIG), one of Wayfair's peers, issued guidance today for Q2 and proved that the consumers have RETURNED to its brick-and-mortar stores.

BIG's statement has negative implications for Wayfair's revenue in Q2 and the next quarters because it proves that Wayfair's temporary revenue growth in April thanks to Coronavirus is OVER.

Specifically, BIG said today about its SECOND quarter sales that began in May:

"Looking forward, we are off to a STRONG start in the SECOND quarter, and believe we are well positioned to navigate through the ongoing COVID-19 crisis, with strong alignment between our assortment and current customer demand."

and:

"For the second quarter to date, comparable sales are UP STRONGLY, reflecting a continuation of the acceleration in business that began in mid-April. The company expects comp trends to moderate over the balance of the quarter due to a number of factors, including competitors and other retailers reopening....."

[Value Digger]

Wayfair's (W) common stock is worth ZERO, fundamentally speaking, due to Negative Stockholders' Equity.

This is a strong indication of the upcoming COLLAPSE of the stock price when perception catches up with reality or BANKRUPTCY based on a bunch of previous cases with other unprofitable leveraged low-margin retailers that are cash incinerators.

For instance, see the Negative Stockholder Equity for the retailers that have filed for bankruptcy such as Pier 1 (PIR), Bon-Ton Stores (BONT), Sears Holdings (SHLD), Westmoreland Coal (WLB), Quicksilver Resources (KWK), American Apparel (APP), Aeropostale (ARO), Pacific Sunwear (PSUN), Quicksilver (ZQK), Coldwater Creek (CWTR), to name some.

See also Michaels (MIK), another retailer with NEGATIVE stockholders equity from the home furnishings sector. MIK is a case study about the collapse of the stock price.

MIK was $17 about one year ago.

But MIK's stockholders' equity is deeply Negative, so MIK's stock is worth Zero.

MIK is about $3 today. So perception caught up with reality and MIK's stock converged to its Book Value.

And W's business model is much WORSE than MIK's.

Specifically, MIK has been profitable with positive operating cash flow, free cash flow, positive working capital and high gross profit margin at about 36%.

W has been recording massive losses, has negative operating cash flow, has been burning cash, has negative working capital and low gross profit margin at about 24%.

[halba12]

the market is in a huge dot com bubble.

[skan51]

Did I understand it correctly: It looks like they had the best quarter ever. During this quarter free cash flow loss is 354.6, During the entire 2019 free cash flow loss was 597.7. So in the first quarter of 2020 they lost more than half of what they lost for the entire 2019. The more they sell, the more they lost. How can this be sustainable?

[bosox040]

It's not sustainable. This company is a joke and a hoax. They are being propped up by analysts and algorithmic trading.

[maximumvalues]

Yep, the more short interest the more pump. I feel like a fool for not going long the last gap up in the 70s .. oh well. Missed out.