- Wayfair beat on both lines. The furniture retailer reported adjusted earnings of 93 cents a share versus the 79 cents expected by LSEG, and revenue of $3.42 billion versus $3.38 billion expected. Total revenue grew 9.7% year over year, its strongest quarter of sales growth since the pandemic.
- The US is doing the work. US revenue rose 11.4% to about $3 billion, while international net revenue decreased 2.3% to $380 million.
- Profits turned positive. Net income was $62 million, or 45 cents a share, compared with a loss of $99 million, or 76 cents a share, a year earlier. Active customers grew 4.7% to 22.2 million and orders delivered rose 12.2% to about 11 million.
- Share gains in a flat market. CFO Kate Gulliver told CNBC the US consumer in the category is “roughly flattish,” so the growth reflects Wayfair’s market share momentum, helped by shopper loyalty, new stores, its luxury business and a focus on value.
What Happened?
Wayfair reported third-quarter results on Wednesday showing double-digit US revenue growth despite a sluggish housing market. Gulliver said customers continue to spend at both value and luxury price points. “We’ve been highly promotional for the last few years, and the promotional activity this year is actually very consistent with last year,” she said, adding that the growth has flowed through to EBITDA and to positive net income this quarter.
Why It Matters?
Furniture demand is closely tied to home sales, which remain frozen, so Wayfair growing about 10% while the category is roughly flat points to real share gains, likely from weaker rivals. The swing to net profit is important for a company that spent years losing money, showing it can grow without deeper discounting since promotions were steady year over year. The weak international business is a reminder that the gains are concentrated in the US.
What’s Next?
Wayfair plans to keep promotional activity similar to last year through the holiday season and the fourth quarter, and Gulliver said she is confident its range of prices and products will appeal to a broad base of consumers. Investors will watch whether the share gains last if the housing market stays weak, and whether profitability holds through the holiday period. Any easing in mortgage rates could add a tailwind for home furnishings demand.
Affected Tickers and Coins: W, RH, WSM, XHB
Source: CNBC
