Wayfair CEO: 'Short-Term Mindset' Of The Street Has Hurt Us, But It's Turning Around As Quarters Get Announced

E-commerce company Wayfair Inc W had a strong rally Wednesday on back of the outstanding fourth-quarter and fiscal year 2014 results it declared before market open same day. The company posted fourth-quarter sales of $408.6 million, up 38.4 percent year-over-year and the non-GAAP EPS loss came at $0.18, significantly below the $0.28 number analysts were expecting.

Niraj Shah, Wayfair CEO, was on CNBC to weigh in on the company's earnings.

Hurt By Short-Term Mindset

“It's interesting. The marketing spend has absolutely been working,” Shah said. “When we went public in October, the topic on the road show was actually about the marketing investment we started making in January of 2014 and how it was working. And that's what generated the excitement.”

Shah continued, “And I think what happened is shortly after being public, folks said, ‘Oh! There is an Internet company losing money. Oh, how can that make sense?’

“So, that kind of short-term sort of mindset I think hurt us in that sense, but I think what's happening as the quarters get announced, folks are saying, ‘Oh! Wait a minute, it is working.'”

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Profitability

When asked about the profitability of the company, Shah replied, “We are certainly very focused on growing, but we have not announced a date for profitability. But if you look at the sell-side research models on Wall Street, everyone sort of gets us to profitability by the end of next year.

“If you look at, sort of, our performance and our guidance for Q1, our guidance for Q1 was that EBITDA will be negative 3.5 to negative 4 percent. And that's up from a negative 7 percent a year ago.”