1Q19 Results Wayfair reported 1Q19 revenues of $1.94 billion, up 39% year over year and slightly above the $1.92 billion consensus estimate.  The GAAP net loss was $200.4 million compared to the $107.77 million loss in the year ago quarter. While gross margin increased 113 bps, the gain was more than offset by a 375-bps increase in the SG&A/sales ratio, driving the operating margin down 262 bps. The main reason for the rise in expenses was higher advertising spending and high software development costs.  Adjusted EPS was $(1.62), very slightly behind the consensus estimate of $(1.61). GAAP EPS was $(2.20), compared to $(1.22) in the year-ago quarter. US direct retail revenue grew 38.6% to $1.64 billion, accounting for 85% of total revenue. International direct retail revenue grew 41.7% to $287.1 million. Adjusted EBITDA was $(102.2) million, compared to $(49.96) million in the year-ago quarter. Details from the Quarter Management announced ongoing investment in logistics infrastructure, international expansion and a better customer offering.  "We look forward to the sizeable opportunity ahead as we continue to transform the experience of shopping for the home and remain well positioned to take share of the dollars that are coming online in the home category," said Niraj Shah, CEO, Cofounder and Co-Chairman of Wayfair.  Other details:

• The company’s total addressable market is $430 billion, of which $285 billion is in the US, $75 billion in Germany, $50 billion in the UK and $20 billion in Canada.
• In the first quarter, the number of active customers reached 16.4 million, up 39.1% year over year. In addition, net revenue per active customer increased to $442 from $432 in 1Q18. 
• Repeat customer orders increased 42.3% to 5.4 million, accounting for 66% of total orders.
•  Average order value was $237 in 1Q19 compared to $236 in the first quarter of 2018. The company delivered 8.2 million orders compared to 5.9 million orders, an increase of 42% year over year. 
• The company continues to work on three strategic areas:

o Scaling logistics capabilities.

o Expanding business in Canada, the UK and Germany.

o Penetrating the addressable market.

• During the quarter, 53.4% of total orders delivered were placed via a mobile device, versus 49.2% in 1Q18.
• Wayfair is working with a base of over 11,000 suppliers and building technology in visualization and payment using in-house software capabilities.
• The company aims to reduce advertising expenses from 12.5% in 1Q19 to a range of 6-8% as the size of repeat customers increases and operational efficiency improves.
• At the end of the quarter, the company’s cash and cash equivalents stand at $722.36 million, compared to $522.03 million in 1Q18. The total headcount stood at 13,344. 

Outlook In 2019, management aims to continue building on three strategic areas around logistics, international expansion and a better customer offering to reduce costs. The company did not provide guidance, however, management noted the following long-term targets:

• Gross margin in the range of 25%-27%. 
• Adjusted EBITDA in the range of 8%-10%.
• Total operating expenses in the range of 15%-19%.
• Customer service and merchant fees at 4%.

The consensus estimate for 2Q19 from S&P Capital IQ call for Wayfair to report revenues of $2.22 billion, up 16.5%, gross margin of 23.76% and EPS of $(1.17).