Wayfair has been nothing if not a fascinating stock to watch. In a market freefall just prior to the pandemic with its stock trading for under $40 a share, its stock exploded to almost ten times that price at the height of stay-at-home 2021…only to plummet to barely $30 a share this past winter.
Now, the rocket ride is on the upswing again. In trading on Monday, Jan. 23 Wayfair stock shot up 25% following a favorable upgrading from J.P. Morgan to “overweight” from its previous “underweight” rating where it had been since April of 2020. Analyst Christopher Horvers now pegs the stock price target at $63 a share, an 80 percent jump from where it was just last week.
This past Friday the stock had climbed 20% after Wayfair announced layoffs of 1,750 employees representing about a tenth of its total workforce, what the company called part of its “cost efficiency plan.” That announcement helped flip the Morgan rating, Horvers said.
Wayfair’s wild ride in the market and its lackluster post-pandemic financial performance complicate the outlook for the big online home furnishings retailer. Last year it opened its first true physical stores for several of its sub-brands, including All Modern and Joss + Main.
But the big store news was planned for this year when the retailer was scheduled to open its first Wayfair branded store in the Chicagoland marketplace. At about 150,000-square-feet it was set to open in suburban Wilmette this spring in a former Carson, Pirie Scott location. While Wayfair had never officially announced the store local press reports had confirmed the plan.
Now that plan is on hold for at least a year. The Chicago Tribune reported last week that the store opening was being pushed back until 2024. Neither Wilmette village officials nor Wayfair gave a reason for the delay. The Tribune quoted Village manager Mike Braiman saying, “Ultimately, we are really pleased this project continues to move forward but it is a little bit behind schedule for what was originally scheduled.”
Wayfair associate director of corporate communications Susan Frechette told Warrensreport.com the delay was not related to any cost-cutting measures the company is instituting. “It’s not related. We remain focused on expanding our omnichannel presence with the opening of physical retail locations across our brands.”
Frechette was quoted additionally in the Tribune story saying Wayfair was “excited to work with them (the town of Wilmette) as we proceed with this project, which will begin construction in the near future.” The Tribune said the town had approved design changes for the exterior of the building, located in the Edens Plaza shopping center, but that permits had not been issued for any interior work as of yet.
In announcing its spending cuts, Wayfair outlined three areas that totaled $1.3 billion in annualized savings: $750 million in labor costs, $500 million in operational costs and $150 million in other savings including “capital expenditures.”
Wayfair is expected to report its next financial results, including for its fiscal year, in early February.