The results: In a home furnishings market that Wayfair CEO Niraj Shah describes as “flat to down low-single digits” and “bumping along the bottom,” Wayfair stood out. Excluding its exit from the German market, the company posted its strongest growth since 2021 and returned to profitability.
The numbers:
- Earnings per share hit 87 cents, up 85% YoY and well above the 32 cents analysts expected.
- Revenues rose 5.0% YoY to $3.27 billion, beating the $3.12 billion forecast.
- US revenues grew 5.3% to $2.9 billion.
- International revenues climbed 3.1% to $399 million, or 2.1% on a constant currency basis.
Keys to Wayfair’s success: Shah highlighted three strategic initiatives launched over the past year that have meaningfully contributed to Wayfair’s momentum.
- Wayfair Verified: A curation program introduced in Q4 that uses a “Verified” checkmark to signal quality and reliability. Verified products perform notably better than other items—converting over 25% more, earning Net Promoter Scores around 20% higher, and driving stronger repeat purchase rates. Wayfair plans to significantly expand the program this year.
- Wayfair Rewards: Having debuted over the holidays, the loyalty program is lifting customer lifetime value and reducing acquisition costs by increasing direct traffic. Shoppers are returning more often to spend their rewards, boosting engagement and wallet share.
- Physical retail: The company’s first brick-and-mortar store in Chicago, which opened in May 2024, is generating a notable halo effect with more than a 50% lift in smaller-ticket items like kitchen accessories and a 35% boost in high-consideration categories like bathroom fixtures and kitchen cabinetry. The success is fueling expansion plans, including new locations in Atlanta and Denver next year, and New York in 2027. Wayfair also opened its first Perigold store in Houston, with a second coming to West Palm Beach this fall.
Our take: While many home-related retailers are stuck in neutral amid a sluggish housing market, Wayfair is gaining traction. Its success shows that a willingness to test, learn, and iterate can help retailers stand out in an otherwise stagnant category.