Wayfair (NYSE:W) reported 7.5% year-over-year revenue growth in the second quarter of 2026, led by an 8.7% increase in its U.S. segment, as the online home-goods retailer said it continued to capture market share despite uneven consumer demand and subdued housing turnover.
Chief Executive Officer Niraj Shah said orders rose 6% from a year earlier and more than 12% sequentially from the first quarter, representing the company’s strongest second-quarter sequential order growth since 2020. Active customers increased by more than 3%, while average order value rose 1.2% year over year.
U.S. Growth Offsets International Pressure
Wayfair’s U.S. revenue growth accelerated to nearly 9%, which Shah described as the company’s best domestic revenue growth rate of the post-pandemic period. In contrast, international revenue declined 1.3%, as Canada and the United Kingdom continued to face weaker consumer sentiment and discretionary spending pressure.
Chief Financial Officer Kate Gulliver said Wayfair’s new-order growth accelerated for a fourth consecutive quarter and reached a post-COVID high. Management attributed its U.S. momentum to improvements in pricing, selection, delivery speed and product availability, alongside newer initiatives including Wayfair Rewards, Wayfair Verified, Delivery Plus and physical stores.
For the third quarter, the company projected high-single-digit revenue growth. Gulliver said the outlook does not assume an improvement in broader macroeconomic conditions, but instead reflects the company’s expectation of continued market-share gains from its operating initiatives.
Management said the mass-market Wayfair business remains the company’s primary revenue driver, even as its higher-end businesses grow more rapidly. Shah said promotions remain an important feature of the mass-market home category, which has been promotional for several years, though Wayfair is continuing to refine its promotional calendar and supplier tools.
Perigold Expands Luxury Presence
Wayfair highlighted momentum at Perigold, its luxury home furnishings platform, which grew more than 35% year over year during the second quarter. The company’s specialty retail brands collectively grew nearly 20%.
Shah said Perigold now generates slightly more than $400 million in annual sales and has posted double-digit growth every year since its 2017 launch, including growth of more than 20% in both 2024 and 2025. The platform offers nearly 3.5 million products from 1,500 brands and has an active customer base approaching 400,000, up nearly 20% from a year earlier.
Perigold customers spend nearly three times as much annually as a typical Wayfair.com customer, according to Shah. About 40% of Perigold customers each year are new to Wayfair’s family of brands. The company also said business-to-business volume reached an all-time high share of Perigold sales following a relaunch of its trade program for designers, architects and other professionals.
Wayfair has opened two Perigold stores, in Houston and West Palm Beach. Shah said those locations are producing average order values above the online business and are generating early design-led project pipelines. The company plans to introduce a Perigold loyalty program later this year and intends to expand its luxury store presence over time.
Shah also described the use of internally developed artificial intelligence tools for Perigold product and lifestyle imagery. He said a seasonal outdoor imagery project that could have required roughly $2 million in traditional production costs was completed for less than $10,000 using an AI pipeline, with stylists overseeing the output and automated quality checks applied to images.
Margins, Cash Flow and Capital Structure
Wayfair reported a 30.0% gross margin in the second quarter and a 15.3% contribution margin, which reflects gross profit less customer service, merchant and advertising costs. Advertising expense represented 11.1% of revenue, while customer service and merchant fees were 3.6%.
Selling, operations, technology and general and administrative expenses totaled $361 million. Gulliver said the company generated $242 million in adjusted EBITDA, equivalent to a 6.9% margin, its best EBITDA margin since 2021. The company also generated $301 million in free cash flow, up more than 30% year over year and its strongest quarterly cash generation since the second quarter of 2020.
- Cash and equivalents: $1.1 billion at quarter-end
- Total liquidity, including an undrawn revolver: $1.6 billion
- Cash from operations: $360 million
- Capital expenditures: $59 million
During the quarter, Wayfair issued a $400 million high-yield note and used the proceeds to redeem the remainder of its 2028 convertible bonds. The company said it has $39 million of 2026 bonds and $229 million of 2027 bonds remaining. Gulliver said the reduced convertible debt balance should limit future losses on debt extinguishment that have affected GAAP net income in recent periods.
Wayfair said stock-based compensation on a trailing 12-month basis was about 40% lower than two years earlier. The company expects to use future free cash flow opportunistically for share repurchases, with an initial objective of more directly offsetting stock-based compensation dilution.
Third-Quarter Outlook
For the third quarter, Wayfair forecast gross margin of 29.5% to 30.5%, with results expected toward the lower end as it continues to invest in customer experience and loyalty. The company expects those investments to be largely offset by lower advertising expense.
Wayfair projected customer service and merchant fees just below 4% of revenue, advertising expense of 10.5% to 11.5% of revenue, and contribution margin in line with or slightly above the second-quarter level. It expects selling, operations, technology and G&A expenses of $360 million to $370 million and adjusted EBITDA margin of 6% to 7%.
Management also forecast third-quarter capital expenditures of $60 million to $70 million. The company plans to continue investing in physical retail, with a Denver store scheduled to open this fall and additional Wayfair locations planned next year in Westchester, Fort Lauderdale, Cincinnati, Princeton and Pittsburgh.
About Wayfair (NYSE:W)
Wayfair Inc (NYSE: W) is an e-commerce company focused on home furnishings and décor. Through its platform, Wayfair offers a broad assortment of furniture, lighting, home textiles, kitchenware and decorative accessories. The company’s portfolio includes flagship sites such as Wayfair.com, as well as specialty retail brands like Joss & Main, AllModern, Birch Lane and Perigold, each catering to distinct design styles and price points.
Founded in 2002 by Niraj Shah and Steve Conine under the name CSN Stores, the business rebranded as Wayfair in 2011 and went public in 2014.
