Why Wayfair Is Bullish On The Future

Wayfair does not agree with industry analysis portending a grim future for it.

In a conversation with Jim Cramer, CNBC reports, Wayfair’s co-founder and CEO Niraj Shah, faced with the fact that the discount furniture and home goods retailer is coming off a year in which its stock price dropped more than 16 percent, looked further into his company’s past for a positive outlook on what lies ahead.

“Our company was actually profitable for the first nine years, which folks tend to overlook,” Shah remarked.

CNBC notes that Wayfair’s earnings report last Thursday (Feb. 25) was a bit surprising in that, although the company did report a loss, it was a significantly smaller one that Wall Street had expected: 7 cents per share, half the amount of the predicted 14-cent drop. Similarly, the revenue that the company reported was higher than expected at 81 percent.

Pointing to the financial struggles that have befallen retailers in the same space as Wayfair, such as Williams-Sonoma and Restoration Hardware, Cramer put it to Shah to explain why he believed his company would avoid such a fate.

“To be fair, both of them play at the very high end of the market. Their products are very expensive, so they’re really not making them affordable,” observed Shah.

Additionally, Shah shared his belief that the models of Restoration Hardware and Williams-Sonoma are markedly different from that of Wayfair. While the others stores are heavily dependent on physical retail, inventory and catalog operations, Shah attested that Wayfair’s model is much larger by comparison, and carries a much different array of merchandise.

“If you want to have the thesis that Wayfair doesn’t make sense, you could say that,” commented Shah, “but I think as you do research you would find that Wayfair is actually a very strong company.”