Wayfair (W) face potential risk to its H2 results as tariff-led inflation could impact consumer demand for furniture and home furnishings, RBC Capital Markets said in a note Wednesday.
"Due to anticipatory inventory building ahead of tariffs and import lead times, tariffed goods are just starting to land now, which means the impact to consumer prices will primarily hit in Q3 and beyond," RBC said.
For Q2, RBC said it expects Wayfair's net sales to be flat and in line with consensus, though a slight beat could be possible given the company's extended WayDay promotion and improved consumer confidence. The investment firm said it also expects a flat gross margin for Q2.
Wayfair is set to release its Q2 results on Aug. 4.
RBC Capital Markets has a sector perform rating on Wayfair, with a $25 price target.
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