Wayfair stock surges 20% as earnings beat, revenue jumps

Online home goods company Wayfair reported a jump in third-quarter revenue on Tuesday, as it beat Wall Street estimates on the top and bottom lines.

The company said total net revenue increased 8.1% year-over-year.

Here's how the company performed in its third quarter, compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

Wayfair shares climbed more than 20% in early trading.

For the period ended Sept. 30, Wayfair reported a net loss of $99 million, or 76 cents per share, compared to a loss of $74 million, or 60 cents per share, the year prior.

The company's U.S. revenue rose 8.6% year over year to $2.7 billion, while international revenue climbed 4.6% year over year to $389 million. Wayfair said its total net revenue excluding its Germany exit jumped 9% year over year.

The revenue increase comes as the overall home goods sector has seen recent struggles, partly due to rising inflation and lower home turnover during a stretch of high interest rates. The sector has also faced challenges in President Donald Trump's furniture tariffs, in addition to other duties — though rates on imported goods from many countries are now lower than Trump proposed earlier this year.

CFO Kate Gulliver told CNBC that the company doesn't credit the growth to any macro-related factors like tariffs or interest rates.

"We think it's really being driven by our share gain, and that, we believe is really coming from a confluence of factors and initiatives that we started over a year ago that are now starting to bear fruit," Gulliver said.

Those initiatives include what Gulliver calls the company's "core recipe" – price, product availability and speed – in addition to growth from its loyalty program, site improvement and physical retail. The retailer opened its first large store in Illinois last year to ride the wave of physical stores' comeback. Based on that success, it plans to open another location in Yonkers, New York, in early 2027.

Though tariff policy has created uncertainty for the company, she said it has been able to lean on the strength of its model: operating as a marketplace on the back end and as a retailer on the front end.

Wayfair saw a post-pandemic slump in sales in what was a "somewhat challenged" time for the home goods category, Gulliver said, but the past year has brought increased momentum. Despite tariff volatility, Wayfair's stock had gained roughly 95% this year as of Monday's close.

CEO Niraj Shah added in the earnings release that the company's delivered orders for the quarter grew 5% year-over-year.

"Our 6.7% Adjusted EBITDA margin marks the highest level achieved in Wayfair's history outside of the pandemic period," Shah said on a call with analysts. "As we've promised, substantial profitability flow through is powered by a strong contribution margin and fixed cost discipline as our business has returned to growth."

Wayfair said its active customers totaled 21.2 million at the end of the quarter, a 2.3% decrease year over year.

Shah added on the Tuesday call that Wayfair's growth plan is driven by "Wayfair-specific factors" and is "not reliant upon a recovery in the housing market." He said the company saw few isolated examples of early purchases to avoid tariffs like a "short-lived" increase in large appliance sales in the early spring.

"We see our outperformance as structural share capture driven by our strong day-to-day execution against the core recipe, the early success of the new programs we've been able to launch and from the broad gains we have brought to bear from our technology team," Shah said.