Wayfair focuses on small wins in its fiscal-year report

2025.03.03

The exterior of the Wayfair store in Wilmette, Illinois Courtesy of Wayfair

Wayfair continues to do a little less worse. It might even do better sometime soon.

In reporting its financial results for the fourth quarter and summing up its fiscal year, Wayfair showed small steps in the right direction. The e-commerce giant had gains in its top line for that final quarter, even as the full-year results were still in negative territory. But for both the quarter and the year, the company lost money, albeit less than in the corresponding periods of a year ago.

Wayfair, which has specialized in rose-colored vision for much of its existence, defended the results as a sign that things were not only better—they were better than better. “The fourth quarter was a strong conclusion to the year across multiple fronts,” said CEO and co-founder Niraj Shah in the report. “From a topline performance perspective, we ended 2024 on a high note—with net revenue showing positive year-over-year growth. These results enabled us to drive nearly $100 million dollars of adjusted EBITDA in the quarter, and deliver on our goal of approximately 50% year-over-year dollar growth for 2024.”

It’s true, many of the off-the-balance-sheet results showed improvement, including EBITDA (earnings before interest, taxes, depreciation and amortization). Net revenue per active customer was $555 for the fourth quarter, up 3.4 percent from the year before. Orders per customer were 1.85 for Q4, up slightly from 1.84, and average order value was $290, up from $276.

Still, some of the other matrices were less encouraging. Active customers totaled 21.4 million in the fourth quarter, a decrease of 4.5 percent year over year. Orders delivered totaled 10.7 million, a decrease of 5.3 percent. And repeat customers placed 8.5 million orders, down 5.6 percent from the previous year.

For the year, Wayfair had revenues of $11.9 billion, a $152 million (1.3 percent) decline year over year. U.S. revenues, which make up around 90 percent of the company’s total revenues, declined 1 percent. Fourth-quarter net revenues totaled $3.1 billion, up $7 million (0.2 percent).

For the fourth quarter, net losses were $128 million, compared to $174 million last year. For the full year, Wayfair’s net loss was $492 million, about a third less than its $738 million loss the previous fiscal year.

During the call with analysts following the earnings report, Shah mentioned a few other newsworthy items. He said, “We are already fast at work on our second Wayfair store,” but gave no details on timing or location, and announced the company will open the first two Perigold stores later this year. He also talked about the launch of Muse, Wayfair’s new AI-driven shopping tool, which has replaced Decorify. Shah also mentioned the company’s previously announced exit from the German market, saying they wanted to focus on more profitable areas of business.

Shah said the improvements in Wayfair’s overall results are allowing the company to seek better financing arrangements, further helping its quest for profitability. “We’re making smart, high-return investments across the business, and at the same time remain committed to growing adjusted EBITDA dollars year-over-year,” he said in the earnings report. “We are confident this approach sets us up well for a compelling payout over 2025 and are excited to bring all of our stakeholders with us on this next leg of the Wayfair journey.”

That journey is still largely dependent on the overall health of the home furnishings market, which is showing meager signs of a recovery but is struggling to reengage a consumer still shopped out from the pandemic-era feeding frenzy. It was during that surge that Wayfair registered its first profitable quarters in its 11-year history as a public company. A return to those black-ink days has been elusive ever since, but at least according to Shah, it’s right around the next living room corner.

Wall Street seemed to have a mixed reaction to that storyline: Wayfair’s stock took an initial hit on Thursday morning when the results were released but recovered most of that, finishing the day off less than 1 percent. Wayfair’s share price has zigged and zagged for much of the past year, hitting a high of $73 last May before its 52-week low of just under $38 in November. If investors are ever going to send Wayfair back to pandemic-era heights (when its stock traded above $300), the company’s small steps in the right direction will have to get bigger.