Wayfair surprised investors this year with a strong rebound, marking a significant milestone for the company and the broader home furnishings space. Wayfair reports its first yearly sales increase since 2020, beating the broader furniture market, signaling renewed momentum at a time when many competitors are still navigating sluggish demand.
A Long-Awaited Annual Sales Rebound
After several challenging years, Wayfair managed to reverse its downward revenue trend. In 2025, the online furniture retailer generated $12.5 billion in revenue, reflecting a 5.1% increase from the previous year. That growth stands in contrast to 2024, when sales dipped by more than 1% year over year.
The improvement is particularly notable because it comes during a period when the overall furniture category contracted in the low single digits in the final quarter of the year. Despite that industry softness, Wayfair expanded its market share, fueled by steady new customer acquisition and higher repeat purchases.
Co-founder and CEO Niraj Shah described the fourth quarter as the capstone of what he called a “tremendous year.” The company recorded its third consecutive quarter of growth in new customers, alongside healthy gains in repeat orders. According to Shah, 2025 marked a pivotal shift back to sustainable expansion, driven by organic strategies designed to deliver long-term compounding benefits.
Fourth-Quarter Results Outperform Expectations
Wayfair not only posted full-year growth but also exceeded Wall Street forecasts in the fourth quarter on both revenue and earnings.
Here’s how the company performed compared to analyst expectations:
Adjusted earnings per share: 85 cents vs. 66 cents expected
Revenue: $3.34 billion vs. $3.30 billion expected
For the quarter ending December 31, Wayfair reported a net loss of $116 million, or 89 cents per share. That’s an improvement from the $128 million loss, or $1.02 per share, recorded in the same quarter a year earlier. When excluding one-time expenses such as equity-based compensation and other nonrecurring charges, adjusted earnings per share came in at 85 cents.
Revenue during the quarter rose about 7% year over year, climbing from $3.12 billion to $3.34 billion. This marked the second consecutive quarter of meaningful revenue gains — an encouraging signal after multiple years of volatility.
However, despite the positive earnings surprise, Wayfair shares fell nearly 10% following the announcement, suggesting that investors may be cautious about the broader retail environment or future guidance.
Improving Profitability Signals Stronger Fundamentals
While Wayfair has not posted an annual net profit since 2020, its profitability metrics are steadily improving. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) reached $224 million in the fourth quarter, surpassing expectations of $200 million.
Chief Financial Officer Kate Gulliver described 2025 as a defining year for the company’s financial trajectory. According to Gulliver, Wayfair proved that it could grow market share while also improving margins — a combination that had previously been questioned by some investors.
The recent revenue momentum has directly supported profitability. If current sales trends persist, the company anticipates continued improvements to its bottom line in the quarters ahead.
Thriving in a Challenging Furniture Market
Wayfair’s performance stands out because the broader furniture industry remains under pressure. High interest rates, slower home sales, and ongoing tariff concerns have dampened demand for large-ticket home purchases like sofas and dining tables.
Consumers are still spending — but selectively. Shoppers are increasingly focused on value, discounts, and competitive pricing. Wayfair appears well-positioned to capitalize on this shift, leveraging its expansive supplier network to offer a wide assortment of products at competitive price points.
During the fourth quarter:
Average order value increased to $301, up from $290 a year earlier.
The number of delivered orders grew at a pace similar to the rise in average order values.
Although prices across the home goods sector have edged higher, Wayfair’s order volume growth has kept pace with pricing trends — a sign that customers continue to find value in its offerings.
Investing in Customer Experience and Brand Trust
Beyond pricing strategy, Wayfair has focused heavily on improving the overall customer experience. Over the past year, the company expanded its rewards program and introduced initiatives such as “Wayfair Verify,” a quality assurance label that highlights products meeting the company’s internal standards.
The retailer also upgraded its website interface to create a smoother browsing and checkout experience. These customer-facing enhancements appear to be contributing to higher engagement and stronger repeat purchasing behavior.
Gulliver emphasized that these initiatives have helped Wayfair capture additional market share, even within what remains a challenged retail category.
What Comes Next for Wayfair?
The company’s return to revenue growth over the last two quarters has provided a much-needed boost to investor confidence in its long-term strategy. While external pressures such as macroeconomic uncertainty and housing market weakness remain, Wayfair’s ability to grow amid those headwinds suggests operational resilience.
If demand stabilizes and consumer confidence improves, the company could see further margin expansion and potentially move closer to sustained profitability.
For now, one fact stands out clearly: Wayfair reports its first yearly sales increase since 2020, beating the broader furniture market, marking a turning point that may redefine its post-pandemic growth story.
