Q2 Earnings Review: Online Retail Stocks Led by Carvana (NYSE:CVNA)
Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Carvana (NYSE:CVNA) and the best and worst performers in the online retail industry.
Consumers ever rising demand for convenience, selection, and speed are secular engines underpinning ecommerce adoption. For years prior to Covid, ecommerce penetration as a percentage of overall retail would grow 1-2% annually, but in 2020 adoption accelerated by 5%, reaching 25%, as increased emphasis on convenience drove consumers to structurally buy more online. The surge in buying caused many online retailers to rapidly grow their logistics infrastructures, preparing them for further growth in the years ahead as consumer shopping habits continue to shift online.
The 5 online retail stocks we track reported a slower Q2. As a group, revenues beat analysts’ consensus estimates by 0.8%.
Inflation progressed towards the Fed’s 2% goal at the end of 2023, leading to strong stock market performance. On the other hand, 2024 has been a bumpier ride as the market switches between optimism and pessimism around rate cuts and inflation. However, online retail stocks have held steady amidst all this with share prices up 4.2% on average since the latest earnings results.
Best Q2: Carvana (NYSE:CVNA)
Known for its glass tower car vending machines, Carvana (NYSE:CVNA) provides a convenient automotive shopping experience by offering an online platform for buying and selling used cars.
Carvana reported revenues of $3.41 billion, up 14.9% year on year. This print exceeded analysts’ expectations by 4.6%. Overall, it was a strong quarter for the company, with EPS exceeding analysts' expectations. In addition, free cash flow significantly improved.
Carvana achieved the biggest analyst estimates beat of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 2.3% since reporting and currently trades at $130.20.
Is now the time to buy Carvana? Access our full analysis of the earnings results here, it’s free.
Revolve (NYSE:RVLV)
Launched in 2003 by software engineers Michael Mente and Mike Karanikolas, Revolve Group (NASDAQ: RVLV) is a next generation fashion retailer that leverages social media and a community of fashion influencers to drive its merchandising strategy.
Revolve reported revenues of $282.5 million, up 3.2% year on year, outperforming analysts’ expectations by 1.9%. The business performed better than its peers, but it was unfortunately a mixed quarter with a decent beat of analysts’ buyer estimates but slow revenue growth.
The market seems happy with the results as the stock is up 24.5% since reporting. It currently trades at $21.87.
Is now the time to buy Revolve? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Wayfair (NYSE:W)
Launched in 2002 by founder Niraj Shah, Wayfair (NYSE: W) is a leading online retailer for mass market home goods in the US, UK, Canada, and Germany.
Wayfair reported revenues of $3.12 billion, down 1.7% year on year, falling short of analysts’ expectations by 2%. It was a disappointing quarter as it posted a miss of analysts’ buyer estimates and slow revenue growth.
Wayfair delivered the weakest performance against analyst estimates and slowest revenue growth in the group. The company reported 22 million active buyers, up 0.9% year on year. As expected, the stock is down 20.5% since the results and currently trades at $43.25.
Read our full analysis of Wayfair’s results here.
Coupang (NYSE:CPNG)
Founded in 2010 by Harvard Business School student Bom Kim, Coupang (NYSE:CPNG) is a South Korean e-commerce giant often referred to as the "Amazon of South Korea".
Coupang reported revenues of $7.32 billion, up 25.4% year on year. This number was in line with analysts’ expectations. More broadly, it was a strong quarter as it recorded a miss of analysts’ buyer estimates.
Coupang delivered the fastest revenue growth among its peers. The company reported 21.7 million active buyers, up 11.9% year on year. The stock is up 11.2% since reporting and currently trades at $22.99.
Read our full, actionable report on Coupang here, it’s free.
Chewy (NYSE:CHWY)
Founded by Ryan Cohen who later became known for his involvement in GameStop, Chewy (NYSE: CHWY) is an online retailer specializing in pet food, supplies, and healthcare services.
Chewy reported revenues of $2.86 billion, up 2.6% year on year. This number was in line with analysts’ expectations. Taking a step back, it was a strong quarter as it produced slow revenue growth.
The stock is up 8.2% since reporting and currently trades at $27.93.
Read our full, actionable report on Chewy here, it’s free.
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