Wayfair’s fourth quarter was marked by revenue and profit performance that exceeded Wall Street expectations, but the market reacted negatively as management acknowledged continued customer softness and headwinds in active customers. CEO Niraj Shah described the quarter as a period in which the company “returned to growth and accelerated throughout the year,” largely driven by initiatives such as store expansion and the Wayfair Rewards loyalty program. Despite these efforts, active customers declined year over year, and management highlighted ongoing challenges in the broader home goods category, noting it “contracted in the low single digits for the final quarter of the year.”

Is now the time to buy W? Find out in our full research report (it’s free for active Edge members).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Wayfair’s Q4 Earnings Call

• Eric Sheridan (Goldman Sachs): asked about Wayfair’s AI initiatives and external partnerships. CEO Niraj Shah described ongoing deployment of AI for workflow automation and highlighted early partnerships with major generative AI platforms to optimize product visibility and future ad units.
• Simeon Gutman (Morgan Stanley): questioned the sustainability of margin expansion and timeline to 10%+ adjusted EBITDA margin. CFO Kate Gulliver stressed the company’s ability to grow EBITDA faster than revenue through cost leverage and ongoing optimization, even in a subdued macro environment.
• Steven Forbes (Guggenheim Securities): inquired about performance and impact from physical retail expansion. Shah detailed the continued outperformance in the Chicago area and outlined how new stores are expected to drive new customer acquisition and higher share of wallet.
• Zachary Fadem (Wells Fargo): asked about the ongoing gross margin drag from Wayfair Rewards. Gulliver explained that the margin impact is offset by higher profitability per customer and that growing the program remains a priority due to its positive effect on adjusted EBITDA.
• Brian Nagel (Oppenheimer): asked about the breadth of market share gains and customer cohorts. Gulliver reported consistent gains across segments, with higher-income and luxury customers performing best, but noted that the platform covers the full market spectrum.

Catalysts in Upcoming Quarters

Looking ahead, our analysts will watch (1) whether Wayfair can accelerate new customer growth and offset the decline in active users, (2) the performance and profitability of new physical stores as they open in additional markets, and (3) the impact of expanding the Wayfair Rewards program internationally and into luxury segments. Execution in scaling AI-powered operational improvements will also be a key marker of success.

Wayfair currently trades at $74.28, down from $91.48 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).

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