On Friday, KeyBanc Capital Markets maintained its Sector Weight rating on Wayfair Inc (NYSE:W) stock, a leading e-commerce company specializing in home goods.
The firm's analyst highlighted the potential growth opportunities associated with Wayfair's expansion into physical retail, with the grand opening of Wayfair’s first branded store in Wilmette, Illinois, scheduled for the upcoming Thursday, May 23.
The analyst anticipates that while Wayfair's physical stores are not expected to significantly contribute to the company's revenue or EBITDA in the next 12 to 18 months, there is a meaningful growth potential in the long term.
The expansion of physical stores in large markets could increase Wayfair's total sales by 15-40% over the next decade, with an even greater increase in EBITDA.
The report also mentioned that despite the near-term risks posed by industry challenges, there is a positive outlook for significant industry recovery potential in the future. The firm plans to share further insights and observations following the visit to the new store.
Wayfair's move into brick-and-mortar retail represents a strategic step as the company seeks to capitalize on the synergy between online and physical shopping experiences. The new store in Wilmette will serve as a testbed for this omnichannel approach.
The analyst's commentary suggests that while immediate financial impacts from the store openings may be limited, the long-term strategy could be beneficial for Wayfair's growth.
The company's efforts to integrate physical retail with its established online presence could position it well within the competitive home goods market.
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