Wayfair posts first annual sales gain since 2020, outperforms overall furniture market

Wayfair‘s annual sales grew last year for the first time since 2020 as the online furniture company continues to win over value-seeking consumers, the retailer announced Thursday. 

In 2025, Wayfair revenue grew 5.1% to $12.5 billion. The gains follow a more than 1% year-over-year decline in 2024.

The e-commerce giant also beat Wall Street’s expectations on the top and bottom lines for its fourth quarter and delivered better-than-expected adjusted earnings as stronger sales flowed through to the business.

“Q4 capped off a tremendous year for Wayfair,” co-founder and CEO Niraj Shah said in a release. “We had our third consecutive quarter of new customer growth, on top of healthy growth in repeat orders, all in the face of a category that contracted in the low single digits for the final quarter of the year. 2025 was a year where we returned to growth and accelerated throughout the year through a number of organic business strategies that can compound for years to come.”

Despite the sales growth and better-than-expected results, Wayfair shares dropped nearly 10% on Thursday.

Here’s how Wayfair did in its fourth quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

• Earnings per share: 85 cents adjusted vs. 66 cents expected
• Revenue: $3.34 billion vs. $3.30 billion expected

In the three-month period that ended Dec. 31, Wayfair reported a loss of $116 million, or 89 cents per share, compared with a loss of $128 million, or $1.02 per share, a year earlier. Excluding one-time items related to equity-based compensation and other nonrecurring charges, Wayfair saw earnings per share of 85 cents. 

For the second quarter in a row, Wayfair had a meaningful gain in revenue. During the period, sales rose to $3.34 billion, up about 7% from $3.12 billion a year earlier. 

While Wayfair has not posted an annual net profit since 2020, it is making gains in its adjusted earnings before interest, taxes, depreciation and amortization. During the quarter, Wayfair posted adjusted EBITDA of $224 million, ahead of expectations of $200 million, according to StreetAccount. 

“Ultimately, this is the culmination of the work throughout 2025, which I think was a really pivotal year for us in proving out both our share gain story and our profit story,” finance chief Kate Gulliver told CNBC in an interview. “That resulted in both an incredibly strong quarter on the top line, where we continued to gain share despite a challenging macro, and then really nice flow through and significant growth on the adjusted EBITDA line.” 

The company’s return to revenue growth over the last two quarters has helped its profitability. If the sales trends continue, Wayfair expects to see more improvements to its bottom line. 

Wayfair’s growth comes during a challenging time for the furniture industry, when tariffs, high interest rates and sluggish home sales are weighing on demand for new couches and kitchen tables. Consumers are still spending on these goods, but instead prioritizing value and lower prices, which Wayfair is positioned to offer through its wide network of manufacturers. 

During the quarter, average order values increased to $301, up from $290 in the year-ago period, while the number of orders delivered grew at a similar pace. While prices have risen across the home goods sector, Wayfair’s volume trends are in line with its order values. 

Over the last year, Wayfair has focused on improving its customer experience through its rewards program and initiatives like Wayfair verify, which stamps products that have the quality the company says it endorses. It also improved its website, said Gulliver. 

“The combination of these customer-facing initiatives, I think, has helped us take share in what we think was still quite a challenged category,” said Gulliver.