Shares of Wayfair (NYSE: W) skyrocketed more than 12% following the release of its impressive second-quarter earnings report, which exceeded analyst expectations and marked the company’s strongest profitability since 2021. The home goods giant delivered robust financial results, signaling a potential turnaround as consumer demand in the home furnishings sector shows resilience.

Strong Earnings and Revenue Growth Outperform Estimates

Wayfair reported adjusted earnings per share of $0.87, far surpassing the $0.33 consensus estimate. Revenue climbed 5% year-over-year to $3.27 billion, beating Wall Street’s projection of $3.12 billion. Excluding the impact of its exit from the German market, revenue growth accelerated to 6%. The U.S. market remained a key driver, with sales rising 5.3% to $2.9 billion, while international revenue increased 3.1% to $399 million.

Profitability Reaches Multi-Year High

The company’s gross profit reached $984 million, representing 30.1% of total revenue—a healthy margin that underscores improved cost management. Adjusted EBITDA surged to $205 million, with a margin exceeding 6%, reflecting Wayfair’s ability to streamline operations and enhance efficiency despite economic headwinds.

Fewer Customers, But Higher Spending Per Shopper

While active customer counts dipped 4.5% to 21 million compared to the previous year, Wayfair saw a notable increase in spending per shopper. Revenue per active customer rose 5.9% to $572, while the average order value jumped to $328, up from $313 a year ago. This suggests that while fewer people are shopping with Wayfair, those who do are spending more—a positive sign for long-term revenue stability.

The strong quarterly performance has reignited investor confidence, positioning Wayfair as a potential comeback story in the competitive e-commerce landscape. With profitability on the rise and strategic exits from underperforming markets, the company appears to be on a stronger financial footing as it heads into the second half of the year.