Wayfair returns to growth as value shoppers fuel online demand

Wayfair has returned to annual sales growth after several years of decline, reflecting how consumers are adjusting their furniture spending in a challenging economic environment.

The online retailer reported stronger performance in 2025 as shoppers increasingly prioritised affordability.

Gains in customer numbers, rising order values, and improved operational performance helped drive the turnaround.

The recovery came despite continued pressure on the broader furniture sector from high interest rates, tariffs, and weak housing activity.

However, investors remained cautious, with Wayfair shares falling sharply in premarket trading following the earnings release.

Annual sales rebound

Wayfair reported revenue of $12.5 billion in 2025, marking a 5.1% increase from the previous year.

This ended a stretch of declining annual sales, including a drop of more than 1% in 2024.

The improvement reflected steady gains throughout the year.

The company benefited from growing demand among value-focused consumers, supported by its wide range of competitively priced products and manufacturer partnerships.

Strong quarterly results

The fourth quarter showed clear momentum. Revenue rose to $3.34 billion in the three months ending Dec. 31, up from $3.12 billion a year earlier.

This increase of about 7% marked the second consecutive quarter of meaningful growth.

Wayfair exceeded Wall Street expectations during the period. Adjusted earnings reached 85 cents per share, beating analyst estimates of 66 cents, according to LSEG.

Revenue also surpassed forecasts of $3.30 billion.

The company reported a net loss of $116 million, or 89 cents per share, compared with a loss of $128 million, or $1.02 per share, in the same period a year earlier.

Excluding equity-based compensation and other one-time items, adjusted earnings reflected improved operating performance.

Adjusted EBITDA reached $224 million, exceeding expectations of $200 million, according to StreetAccount.

The stronger earnings performance reflected improved efficiency and the benefits of higher sales flowing through the business.

Customer and order growth

Customer activity played a key role in the company’s recovery.

Wayfair recorded its third consecutive quarter of new customer growth, alongside continued increases in repeat purchases.

Average order values rose to $301 during the quarter, up from $290 a year earlier.

Order volumes increased at a similar pace, showing balanced growth across pricing and customer demand.

Wayfair also focused on improving customer engagement through its rewards programme and its Wayfair Verify initiative, which highlights products that meet quality standards.

The company made additional improvements to its website to enhance the shopping experience.

Gains despite industry pressure

The recovery comes as the furniture industry continues to face headwinds.

High borrowing costs and slower housing activity have reduced demand for major home purchases.

Despite these conditions, consumers are still buying furniture, with a stronger focus on affordability.

Wayfair’s pricing strategy and broad supplier network helped position it to attract these shoppers and gain market share.

Wayfair has not reported an annual net profit since 2020.

However, improving sales and stronger adjusted earnings suggest progress in stabilising its financial performance.

Continued growth could further strengthen its profitability if current trends persist.