Wayfair lost more than a million customers during its latest quarter as shoppers turn away from new furniture and home decorations.
The e-commerce retailer said its active customer count dropped 22.6% during the quarter ending September 30 compared to the same time last year.
The company’s sales also declined 9% during the quarter from a year ago. It lost $283 million.
Wayfair’s (W) stock increased 7% Thursday because the results were better than Wall Street had feared. Still, the company’s stock has plunged nearly 80% this year.
“Wayfair’s business isn’t working and it is losing an extensive amount of market share,” said Neil Saunders, an analyst at GlobalData Retail.
There has been a broader slowdown in furniture and the home goods sector after a boom in 2020 and 2021, when many customers unable to travel or go to the office spent money redecorating their homes.
Persistent inflation, which reached 8.2% in September, also has impacted lower and middle-income shoppers, who have pulled back their discretionary purchases to focus on paying for necessities like groceries, gas and rent.
Wealthier customers also have shifted their spending from furniture and other goods to travel and services. Mortgage rates are up dramatically, cutting into demand for new homes.
“We are seeing shoppers being more deliberate with their spending patterns as they seek out great value and wait for promotions,” Wayfair CEO Niraj Shah said on a call with analysts Thursday.
Wayfair said recently that it will cut nearly 900 jobs, or about 5% of its workforce, and pause a plan international expansion.
Other furniture stores also have been hit hard by the furniture slowdown, including RH (RH) and Williams-Sonoma (WSM), which owns West Elm and Pottery Barn.