The news: Despite a sluggish housing market and shifting tariffs, Wayfair extended its 2025 winning streak, easily surpassing analysts’ Q3 profit expectations.

• Adjusted earnings per share were 70 cents, up 218.1% YoY, and well ahead of the 43 cents expected.
• Revenues were $3.12 billion, up 8.3%, outpacing the $3.02 billion expected. Excluding the exit from the German market, revenues rose 9%.
• US revenues were up 8.6% YoY to $2.73 billion, and international revenues rose 4.6% to $389 million.

What drove the gains: Wayfair’s gains stemmed from 5.4% growth in its orders to 9.8 million, marking a second straight quarter of mid–single-digit growth. CFO Kate Gulliver told CNBC that Wayfair’s strength lies in its core formula: broad product selection, consistent availability, and fast delivery.

Those fundamentals are being reinforced by three key strategic drivers:

• Wayfair Rewards, the retailer’s loyalty program that is boosting customer lifetime value and lowering acquisition costs;
• Wayfair Verified, a curated quality-assurance program giving shoppers greater confidence; and
• Physical stores, which are creating a halo effect across Wayfair’s digital channels, while also while helping it reach the roughly third of consumers who prefer to see and touch furniture before buying.

Wayfair is also using generative AI to enhance discovery, personalization, and conversion. Its AI-powered inspiration engine, Muse, creates photorealistic, shoppable room scenes to engage lower-intent shoppers and feeds into the new Discover tab, which turns inspiration into action. AI is also to improving search relevance, recommendations, and customer support, further strengthening the shopping experience.

Zooming out: Despite headwinds in the housing market, several related companies also posted upbeat results.

• Sherwin-Williams beat expectations, with same-store sales up 3.6%, driven by growth across all markets—though it noted softness in North American DIY sales.
• Whirlpool also exceeded forecasts and is bullish on its domestic manufacturing advantage as new tariffs pressure foreign competitors.

Our take: Wayfair’s stronger-than-expected Q3 results show a resilient consumer, but that momentum may not last. The retailer’s focus on value, convenience, and trust has helped it gain share in a challenging environment. But the growing headwinds—from the latest levies on kitchen cabinets, bathroom vanities, and upholstered furniture, as well as the broader macro environment threaten demand.

With costs climbing and consumers growing increasingly cautious about spending on big-ticket items, execution and differentiation will be critical. Wayfair has shown it can play offense in a down market, but sustaining its momentum won’t be easy.