$W earnings!!
A few thoughts:
1/ This was not a good Q. Adj EBITDA margin was -5.5%, FCF performance similarly poor, weak margins, rev growth slowest ever?
Little/no CAC leverage despite March pop. No leverage on variable headcount despite cuts. See images.
A few thoughts:
1/ This was not a good Q. Adj EBITDA margin was -5.5%, FCF performance similarly poor, weak margins, rev growth slowest ever?
Little/no CAC leverage despite March pop. No leverage on variable headcount despite cuts. See images.
2/ The stock is up because QTD sales are +90% vs +60-80% consensus from crcd panel data. Very strong but unsurprising. As per my comments to @laurenthomas, 86% of the market was shut down, $AMZN de-prioritizing furniture, and WFH purchasing: cnb.cx/2YB2zi3
3/ They will have a good Q2. Surely won't need as much ad spend to drive it -- only game in town! Higher revenues + lower ad spend + probably better GM due to price increases may even lead to US adj EBITDA profitability.
4/ But stores (i.e., 86% of the market) are coming back online. They will discount to clear inventory for CF. $AMZN will re-prioritize furniture. WFH buying will stop. And unemployment is at 15%+. Rev growth will be down y/y by Q1 2021, if not before then. GM will fall with it.
5/ Operational efficiency was weak. Despite headcount reductions, sales per variable employee still fell to new lows. This will continue due to COVID-related precautionary measures. Then this will improve at the same time demand falls sharply.
5/ Will COVID significantly change how we buy furniture? That basically seems to be the only ray of hope from these figures. If it doesn't, then the COVID-related sugar high that I called before it happened will go away.
Stock now trading at ~all time highs. Justified?
Stock now trading at ~all time highs. Justified?
