Wayfair is experiencing a resurgence, posting its first annual revenue growth since 2020. The online furniture retailer reported revenue of $12.5 billion, a 5.1% increase over the previous year, defying a broader contraction in the home goods category. The results, announced on , exceeded Wall Street expectations, though the company’s stock price fell nearly 10% in trading following the release.
The turnaround marks a significant shift for Wayfair, which saw a decline in sales in . The company attributes its renewed growth to a focus on attracting new customers and retaining existing ones, even as the overall furniture market faces headwinds from high interest rates and sluggish home sales. According to CEO Niraj Shah, the company saw its third consecutive quarter of new customer growth alongside healthy repeat order volumes. “Q4 capped off a tremendous year for Wayfair,” Shah stated in a company release. “2025 was a year where we returned to growth and accelerated throughout the year through a number of organic business strategies that can compound for years to come.”
The fourth quarter results were particularly strong, with revenue reaching $3.34 billion, a 6.9% year-over-year increase and slightly above the $3.30 billion analysts had predicted. Adjusted earnings per share (EPS) came in at 85 cents, significantly exceeding the expected 66 cents. While Wayfair continues to operate at a net loss – reporting a loss of $116 million, or 89 cents per share, for the quarter – the company is demonstrating improved profitability. Adjusted EBITDA reached $224 million, surpassing forecasts of $199.2 million.
The improvement in EBITDA is a key indicator of Wayfair’s progress, according to CFO Kate Gulliver. “this is the culmination of the work throughout 2025, which I think was a really pivotal year for us in proving out both our share gain story and our profit story,” Gulliver told CNBC. “That resulted in both an incredibly strong quarter on the top line, where we continued to gain share despite a challenging macro, and then really nice flow through and significant growth on the adjusted EBITDA line.”
Despite the positive financial results, the stock decline suggests investor concerns may center on other metrics. Notably, Wayfair’s active customer base decreased by 400,000 year-over-year, falling to 21 million. This suggests that while the company is successfully attracting new customers, This proves struggling to retain them at the same rate. The drop in active customers could signal increased competition or changing consumer behavior.
Wayfair’s success in a challenging market environment is partly attributed to its ability to cater to value-seeking consumers. The company’s wide network of manufacturers allows it to offer competitive pricing, even as broader economic factors put pressure on household budgets. Average order values also increased to $301 in the fourth quarter, up from $290 in the same period last year, indicating a willingness among customers to spend more per transaction.
The company has also been investing in improving the customer experience, through initiatives like its rewards program and “Wayfair Verify,” a program designed to highlight products meeting the company’s quality standards. These efforts, along with website improvements, are aimed at increasing customer loyalty and driving repeat purchases. “The combination of these customer-facing initiatives, I think, has helped us take share in what we think was still quite a challenged category,” Gulliver explained.
Looking ahead, Wayfair anticipates continued growth and improved profitability if current trends persist. The company’s ability to navigate a complex macroeconomic landscape and maintain its focus on customer acquisition and retention will be crucial to sustaining its momentum. The company’s market capitalization currently stands at $11.92 billion.
The furniture industry as a whole is facing headwinds, including tariffs and high interest rates. Wayfair’s ability to outperform the broader market suggests it is effectively adapting to these challenges and capitalizing on opportunities within the evolving consumer landscape. The company’s focus on organic growth strategies, as highlighted by Shah, positions it for potential long-term success.
