Wayfair's stock rallies as shoppers shrug off tariffs, show early signs of healthy holiday spending

By Steve Gelsi

Retailer expects Q4 revenue to be up in mid-single digits, which would put it above analyst estimates.

Wayfair's stock was rallying Tuesday.

Wayfair's stock rallied to a three-year high Tuesday, after the online retailer said tariffs haven't had an impact on its customers' shopping habits, and signaled a favorable holiday season ahead.

The retailer (W) also topped Wall Street's projections for third-quarter profit and revenue, and issued a bullish fourth-quarter outlook, amid increased spending by its repeat customers.

While some had expected a rush of orders ahead of tariff deadlines as a way to avoid higher prices, and then a slowdown this month as new tariffs on upholstered furniture and bathroom vanities kicked in, but Wayfair said that has not been the case in the three months ended Sept. 30 or even in prior periods this year.

"We really have not seen any consumer behavior based on the tariffs," Wayfair Chief Executive Niraj Shah said on the company's third-quarter financial update with analysts.

"We're seeing strong performance over the first month of the quarter and we're excited about the holiday season ahead," Shah said.

Wayfair is currently projecting its fourth-quarter revenue to rise in the mid-single digit percentage range over the year-ago result of $3.12 billion. A rise of 4% to 6% from there - mid-single digits -puts the company's revenue at about $3.25 billion to $3.31 billion, above the latest analyst estimate of $3.23 billion, according to FactSet data.

Wayfair's stock spiked up 23.2% to $106.50 a share at the closing bell. That's its highest close since April 19, 2022, when it ended the session at $106.60 a share, according to FactSet data.

BofA analyst Michael McGovern upgraded Wayfair's stock to buy from neutral and lifted his price target to $130 a share from $86 a share.

"Wayfair is well-positioned to continue to capture share as year-over-year growth accelerated... versus flattish industry growth," McGovern said in a research note. "With notably cyclical industry still in a three-year trough, we like the entry point for eventual housing market improvement."

Wayfair cited gains in market share, robust consumer spending by higher-income customers, as well as "improvement in the core recipe" of availability, price selection and speed, after a multiyear investment in its technology.

The Boston-based company's repeat customers placed 7.9 million orders in the third quarter, up 6.8% from the year-ago period. Those customers accounted for 80.1% of total orders delivered, up from 79.9% last year.

But, at the same time, the number of active customers fell 2.3% to 21.2 million.

In a statement, Wayfair Chief Executive Shah said the quarter's results benefited from accelerated market-share gains, and cost discipline.

Wayfair said its third-quarter loss widened to $99 million, or 76 cents a share, from a loss of $74 million, or 60 cents a share, in the year-ago quarter.

The company's adjusted earnings of 70 cents a share, which excludes nonrecurring items, such as losses on debt extinguishment, beat the FactSet-compiled consensus estimate of 44 cents a share.

Revenue rose 8% to $3.12 billion from $2.88 billion, ahead of the analyst estimate of $3.02 billion.

The average order value increased to $317 from $310 last year, and orders delivered increased to 10 million from 9 million.

Ahead of Tuesday's trading, Wayfair's stock has risen 95% so far in 2025, while the S&P 500 SPX is up 16.9%.

-Steve Gelsi

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

10-28-25 1612ET