Wayfair reported its strongest domestic growth and best cash generation since the pandemic boom on Tuesday, and Wall Street treated the numbers as the clearest evidence yet that American households have started buying furniture again after two years of holding off.

Sales in the Boston-based retailer’s largest market grew 8.7% to $3.1 billion in the three months ended June 30 — the most that region has expanded since 2020, when the home goods industry surged and Wayfair’s business grew 55%. Free cash flow reached $301 million, also the strongest since 2020.

Total revenue rose 7.5% year over year to $3.52 billion, ahead of the roughly $3.47 billion analysts expected, with adjusted earnings of $0.95 a share against a $0.92 consensus. Adjusted EBITDA came in at $242 million, a 6.9% margin, beating the $230 million estimate. Operating margin was 3%, up from 0.5% a year earlier, and free cash flow swung from negative $106 million in the prior quarter.

Orders delivered totaled 10.6 million against estimates of 10.3 million, and active customers reached 21.7 million versus expectations of 21.5 million, according to StreetAccount. Average order value was the one soft spot at $332, below the $337.57 anticipated. That still marked an increase from $328 a year earlier, and the company closed the quarter with $1.1 billion in cash and equivalents. Trailing twelve-month revenue per active customer rose 4.2% to $596.

The Share-Gain Story

Management was explicit that the growth is coming out of competitors’ hides rather than from a healed housing market. Finance chief Kate Gulliver told CNBC the company is taking share primarily from traditional brick-and-mortar rivals while the housing market remains “stalled.” That distinction matters for reading the print as an industry signal: existing-home turnover is the single largest driver of furniture purchases, and it has not recovered.

The luxury end is doing the heaviest lifting. Co-founder and CEO Niraj Shah said specialty retail brands grew by nearly 20% in the quarter and Perigold, the company’s high-end banner, grew more than 35%, calling it the best sequential second-quarter growth since 2020. Gulliver said higher-income consumers continue to drive demand.

The split runs through the whole report. While U.S. revenue climbed $251 million, international net revenue fell 1.3% to $394 million. Adjusted gross profit rose to $1.06 billion from $986 million a year earlier, and adjusted EBITDA improved from $205 million.

Guidance and the Stock

On the earnings call, Wayfair guided to high single-digit revenue growth for the third quarter with an adjusted EBITDA margin of 6% to 7%. Executives also noted that trailing twelve-month stock-based compensation is down roughly 40% from two years ago, and said contribution margin should come in at or slightly better than the second quarter.

Shares jumped 19.03% to $106.31 in premarket trading, according to Benzinga Pro. The stock held those gains into the open, surging nearly 19% in early trading. Part of that move is mechanical: the short float stands at 14.75 million shares, or 18.38% of the publicly traded float — an exceptionally high level of short interest.

The setup explains the violence of the reaction. After first-quarter results, analysts broadly acknowledged improving execution and share gains but cut price targets anyway on a soft home-furnishings category and thin near-term catalysts — Citi to $95, Mizuho to $90, Baird to $76, Morgan Stanley to $110. Goldman Sachs went to $79 with a Neutral rating and TD Cowen to $75 with a Hold. Tuesday’s print arrived against expectations that had already been marked down.

The Caveats

Wayfair, a pandemic darling, has been working to return to consistent growth and better profitability while the broader home goods market stays under pressure from tariffs, a sluggish housing market and a cash-strapped consumer. The longer arc is less flattering than the quarter: active customers have declined at a 2.2% annual rate over the past two years, even after the 700,000 added in the second quarter.

Profitability also remains a non-GAAP story. On a GAAP basis the company lost $2.44 a share in 2025, and its only annual GAAP profit since its 2014 listing came in 2020. The first quarter of this year produced a $105 million net loss despite $151 million in adjusted EBITDA.

What Tuesday establishes is narrower than a category recovery but more durable than a beat: a domestic consumer at the upper end who is spending on the home again, and an operator converting that into cash for the first time in five years. Whether the rest of the market follows depends on the housing turnover that Gulliver says is still stalled.

JBizNews Desk | New York

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