On-line dwelling decor retailer Wayfair continues to see combined buyer habits amid heightened competitors, with issues concerning the housing market and tariffs additionally looming.
In Wayfair’s third-quarter earnings report for 2025, it revealed that whereas its complete web income reached $3.1 billion in the course of the quarter, up 8.1% year-over-year, the corporate suffered a web lack of $99 million, which is larger than the $42 million web loss it confronted in 2024.
Wayfair additionally had 21.2 million lively clients on its platform in the course of the quarter; nevertheless, this represents a 2.3% lower in comparison with the identical quarter within the earlier yr.
Regardless of having fewer lively clients, the corporate noticed a glimmer of hope in the course of the quarter. Repeat clients positioned 80.1% of complete orders delivered, which is barely larger than the 79.9% it reported throughout the identical time interval the yr earlier than.
Additionally, the typical order worth was $317 in the course of the quarter, $7 larger than the typical order worth throughout the identical quarter in 2024.
Wayfair noticed a lower in lively clients in the course of the third quarter of 2025.
Picture supply: Gabby Jones/Bloomberg through Getty Photographs
Wayfair CEO says dwelling decor class is recovering slowly
Wayfair CEO Niraj Shah mentioned that regardless of a sluggish housing market, the house decor class has “moved past its multiyear trend of double-digit declines” and has been “inching closer and closer to flat over the course of 2025,” throughout an earnings name on Oct. 29,
“Existing home sales continue to bounce along the same multi-decade lows we’ve seen since late 2022,” mentioned Shah. “Decreasing short-term interest rates certainly loosened financial conditions, but mortgages are a longer-duration product, and will require more relief in long-term rates before we start to see a broader unlock in mobility. In that context, it’s important to note that our plan to grow is driven by Wayfair-specific factors and is not reliant upon a recovery in the housing market.”
The common 30-year mortgage fee within the U.S. has decreased barely in current months; nevertheless, it nonetheless hovers above 6%, a determine that has led many customers to delay new dwelling purchases as they battle with affordability. The U.S. housing market seems to be slowly bouncing again, as indicated by its efficiency in September.
How the U.S. housing market carried out in September 2025:
- Current-home gross sales spiked by1.5% month-over-month in September.
- Month-over-month U.S. dwelling gross sales rose within the Northeast, South and West, and fell within the Midwest.
- Unsold housing stock elevated 1.3% month-over-month.
- The median existing-home gross sales worth rose by 2.1% year-over-year, reaching $415,200.
Supply: Nationwide Affiliation of Realtors
“Inventory is matching a five-year high, though it remains below pre-COVID levels,” mentioned NAR Chief Economist Lawrence Yun in a press launch. “Many homeowners are financially comfortable, resulting in very few distressed properties and forced sales. Home prices continue to rise in most parts of the country, further contributing to overall household wealth.”
The housing market isn’t the one menace to the house decor class. Tariffs, which President Donald Trump introduced earlier this yr, have triggered customers nationwide to turn into extra cautious about their spending as they anticipate worth will increase for items and companies.
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Shah mentioned that tariffs haven’t negatively affected the buying habits of Wayfair clients. The corporate solely seen a “short-lived” improve in gross sales of home equipment within the early spring and vanities late within the third quarter.
“We really have not seen any consumer behavior based on the tariffs,” mentioned Shah. “So as we mentioned earlier on the call, the minor pull forwards we saw lasted days in duration and were very small. So we don’t really think there’s any tariff-induced behavior. We actually think the holiday shopping is probably going to be similar to past years.”
He additionally emphasised that “competition remains intense” amongst the corporate’s suppliers, which “provides a structural incentive to keep prices as low as possible” on Wayfair’s platform.
Wayfair unveils plan to win again clients in the course of the holidays
Wayfair expects web income to extend by mid-single digits year-over-year in the course of the vacation season this yr. Its predictions come throughout a time when many customers nationwide are anticipated to spend a report sum of money on vacation buying this yr; nevertheless, extra are searching for reductions and offers amid financial issues.
How U.S. customers plan to buy in the course of the 2025 vacation season:
- Shoppers plan to spend $890.49 per individual on common this yr on vacation presents, meals, decorations and different seasonal objects.
- Additionally, 63% of customers plan to wait till Thanksgiving weekend to do most of their vacation buying, up from 59% final yr.
- Tariffs are a high concern for vacation consumers, with 85% anticipating tariffs to trigger larger costs.
Supply: Nationwide Retail Federation
“With more consumers planning to seek out sale events this year, retailers are prepared to deliver on deals and value to ensure consumers have everything they need to make the holiday special,” said Katherine Cullen, National Retail Federation vice president of industry and consumer insights, in a press release.
As Wayfair prepares for a bustling holiday season, it plans to increase its use of artificial intelligence to keep customers away from rivals.
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- Lululemon CEO raises red flag about customer behavior in stores
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“We are using generative AI to make the shopping journey more intuitive and personal than ever before,” said Wayfair Chief Technology Officer Fiona Tan during the earnings call. “We think about this as an AI-powered growth flywheel to inspire, engage, learn and personalize. It all starts with inspiration. And we’re using generative AI in multiple ways to help customers discover products they love. We developed Muse, our proprietary AI-powered inspiration and discovery engine, to create shoppable photorealistic room scenes to capture the attention of low-intent customers and Spark discovery.”
Tan also said that the company is testing a new AI-powered shopping feature to help customers style rooms in their homes more efficiently.
“We are now preparing to test a new generative AI feature called ‘Complete the Look,’” said Tan. “What’s unique here is our proprietary ability to generate a complete styled room scene where the products visualized are directly inspired by real shoppable items in our catalog. This allows customers to move from individual product ideas to a complete shoppable design plan more intuitively than ever before.”
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