Wayfair Q2 2026 Earnings Call Transcript

On Tuesday, Wayfair (NYSE: W ) discussed second-quarter financial results during its earnings call. The full transcript is provided below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

The full earnings call is available at Summary Wayfair Inc. 2% growth in average order value (AOV). S. segment showed significant strength with nearly 9% revenue growth, and specialty retail brands and Perigold grew by nearly 20% and over 35%, respectively.

The company highlighted the strategic growth of Perigold, its luxury segment, which has consistently achieved double-digit growth and is now posting robust figures, leveraging Wayfair's logistics and technology infrastructure. 9%, with $242 million generated in EBITDA during Q2. Wayfair issued a $400 million high-yield note to refinance debt, improving its leverage profile and receiving a credit rating upgrade from Fitch. 5%, and an adjusted EBITDA margin of 6%-7%.

Management emphasized the positive impact of strategic initiatives like the loyalty program, store openings, and AI applications in enhancing customer experience and driving growth. Future plans include expanding the Perigold catalog, launching a loyalty program for luxury customers, and increasing store presence in luxury markets. Full Transcript OPERATOR Hello everyone. Thank you for joining us and welcome to the Wayfair Q2 2026 earnings release and conference call.

After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Ryan Barney, Head of Investor Relations.

Ryan, please go ahead. Ryan Barney, Head of Investor Relations Good morning and thank you for joining us. Today we will review our second quarter 2026 results. With me are Niraj Shah, Co-founder, Chief Executive Officer and Co-Chairman, Steve Conine, Co-founder and Co-Chairman, and Kate Gulliver, Chief Financial Officer and Chief Administrative Officer.

We will all be available for Q&A following today's prepared remarks. I would like to remind you that our call today will consist of forward-looking statements, including but not limited to those regarding our future prospects, business strategies, industry trends, and our financial performance, including guidance for the third quarter of 2026. All forward-looking statements made on today's call are based on information available to us as of today's date. We cannot guarantee that any forward-looking statements will be accurate, although we believe we have been reasonable in our expectations and assumptions.

Our 10-K for 2025, our 10-Q for this quarter, and our subsequent SEC filings identify certain factors that could cause the Company's actual results to differ materially from those projected in any forward-looking statements made today. Except as required by law, we undertake no obligation to publicly update or revise any of these statements, whether as a result of any new information, future events, or otherwise. Also, please note that during this call we will discuss certain non-GAAP financial measures as we review the Company's performance, including contribution profit, contribution margin, adjusted EBITDA, adjusted EBITDA margin, and free cash flow.

These non-GAAP financial measures should not be considered replacements for, and should be read together with, GAAP results. Please refer to the Investor Relations section of our website to obtain a copy of our earnings release and investor presentation, which contain descriptions of our non-GAAP financial measures and reconciliations of non-GAAP measures to the nearest comparable GAAP measures. This call is being recorded and a webcast will be available for replay on our IR website. I would now like to turn the call over to Niraj.

Niraj Shah, CEO and Co-founder Thanks, Ryan, and good morning, everyone. We're pleased to be with you today to discuss our second quarter results. 5% net revenue growth. Our growth this quarter was fueled by momentum in orders, which were up by 6% for the period.

Compared to Q1, orders were up over 12%, the best sequential growth we've seen in a Q2 since the second quarter of 2020. 2% year over year, continuing a very consistent trend of low- to mid-single-digit growth that we've been seeing for years now. Active customers also continued its upward trend, growing by more than 3% year over year in Q2. S.

since 2021. S. segment accelerated to nearly 9% year-over-year revenue growth, continuing the high single-digit share spread we've held since last fall. S.

was the best we've seen in the entire post-COVID period. In keeping with the often-discussed K-shaped recovery, we saw noteworthy outperformance from both our specialty retail brands, which grew by nearly 20% in the second quarter, and Perigold, which grew by more than 35% in the luxury segment. What is exciting for us is that we are seeing accelerating growth in the Wayfair business and complementing that with outsized growth in the specialty and luxury segments, all building to why we expect to see even further growth acceleration as our numerous initiatives further play out.

Today, I'd like to spend a bit more time digging into Perigold because it's a good example of one of our numerous initiatives, and the momentum we've seen there over the past few years has been tremendous. I'll start with a bit of history for those less familiar. We launched Perigold in 2017 with a simple thesis. S.

has roughly 15 million high-income households that together spend more than $100 billion a year on their homes. Prior to our entry, this customer had no real digital destination that matched the way she actually wants to shop the best design brands in the world. Names like Century Furniture or Vanguard were locked behind exclusive showrooms available to the trade only or scattered across single-style, single-category competitors. Nobody had built the whole of luxury home into one platform that was simple to access.

That gap was the opportunity, and it's exactly what we set out to close. Today, Perigold offers close to three and a half million products from 1,500 brands spanning every style and category of the home. We see a long runway simply in continuing to expand the breadth of what we already do well, and you'll see us build the catalog over time, expanding our selection across classes like large appliances and kitchen cabinetry that historically were not offered on a luxury digital platform.

On the financial side, Perigold has grown at a double-digit rate every single year since launch, including 20-plus percent growth in both 2024 and 2025, and that growth has recently accelerated further. We posted robust double-digit year-over-year growth in both the first and second quarters of this year, meaningfully outpacing the broader luxury home market, which by our estimates and competitor reporting is growing in the low single digits. com's overall scale, but growing quickly and doing so profitably. Margins have also expanded even as we funded two store openings and stepped up our brand investment in Perigold.

We have a clear line of sight to grow Perigold into a multibillion-dollar business in the years ahead. And importantly, we intend to get there while expanding profitability. Consistent with how we run every part of Wayfair, driving the ongoing strength in Perigold is a substantial and growing customer file. We have an active customer base approaching 400,000, up nearly 20% year over year.

com shopper in a single year. Roughly 40% of Perigold customers each year are entirely new to the Wayfair family of brands, which tells you this isn't just a repackaging of existing demand. We're pulling in a customer we would not otherwise reach, one who is more affluent and more resilient across economic cycles. And while a novel aspect of Perigold is its B2C access, our trade and business customer is a real and growing part of the story too.

Following the relaunch of our trade program earlier this year, which introduced a simplified, more competitive discount structure for designers, architects, and other professionals, B2B has grown to an all-time high share of Perigold's volume. So how do we differentiate against a highly fragmented competitive set? Our competitors range from a few national chains who have a specific design point of view to thousands of small independent shops, each with a limited selection. Perigold's advantage is breadth without compromising quality.

We built curation standards around materials and construction so that everything from our opening price point up through the most exclusive design trade brands all meet a consistent bar. The selection overlap between Perigold and Wayfair is very narrow, and by having both platforms, we offer customers the ability to shop the wide expanse of home under one umbrella and benefit from our loyalty programs, delivery capabilities, and technology features.

We are, for the large majority of our supplier base, the primary online partner, which means when a customer comes to Perigold, she's getting the deepest version of that brand's assortment anywhere online, not a curated subset. Just as important, Perigold isn't building all of this on its own. It draws directly on the infrastructure we spent nearly two decades building for Wayfair. Our logistics network, including CastleGate, and our broader delivery network gives Perigold a level of shipping speed and reliability that a business of its scale would be challenged to build independently.

The same is true of our technology platform—search, personalization, checkout, and all the engineering investment that goes into it—and our marketing engine, from our paid media scale to our supplier advertising programs. Because Perigold can lean on that shared investment rather than duplicating it, its own team and dollars go almost entirely towards the things that make it distinctly luxury—curation, brand, and service. That's a structural advantage a standalone luxury competitor simply doesn't have, and it's a big part of why Perigold can punch so far above its weight.

Because the luxury customer's bar for service is even higher than it is for the rest of our business, we built free white glove delivery into the model, along with proactive, high-touch order monitoring on larger purchases, which has driven meaningfully higher repeat rates and post-delivery satisfaction scores. This past year we extended that differentiation by pushing into stores, opening our first two stores for Perigold in Houston and West Palm Beach. About 20% of our store staff are trained designers offering complimentary design services both in-store and virtually.

And those stores are already showing us average order values even higher than what we see online, alongside strong early design-led project pipelines—real proof that the immersive, high-touch model customers expect from luxury retail translates into our own four walls. We're seeing the same pattern in our virtual design business, where a small team is driving average order values many multiples of our typical online site order, precisely because pairing real design expertise with our vast catalog enables customers to embark on larger and more complex design projects.

Let me now turn to where we're applying AI, because it's one of the clearest examples of how much a team of Perigold's size can get done with the right tools. We recently wanted to feature a seasonal outdoor imagery spread, the kind of project that traditionally means location shoots, travel, styling crews, and can run into the millions of dollars and take months. Instead, we used a proprietary AI pipeline that was built in-house. It curates products that work together, composes them into a room, and renders it photorealistically using image models with automated quality checks on every image and our stylists guiding the work to hold to Perigold's luxury standard.

That's roughly $2 million in traditional production costs—travel, crews, studio time—replaced by less than $10,000, well over a 99% reduction. And it means we can refresh and expand imagery across our broad catalog far faster than would otherwise be possible. That quality bar matters enormously here because a luxury shopper expects every image to look as considered and premium as the product itself. She notices lighting, styling, and finish.

So this only works because the output meets that standard. We're extending these tools across product and environmental imagery, and we expect them to make our product pages steadily more complete and compelling over the coming quarters. It also means we can refresh and expand imagery far faster and more often than traditional production would allow. Beyond imagery, we're using AI to improve product content and merchandising accuracy across the catalog, and we're building tools to help our design consultants—both our virtual team and the designers in our stores—source and present the right products to a customer faster.

This builds on the broader company-wide investment we're making in AI, and Perigold is a good example of how those platform-level capabilities pay off in a specific, high-value part of the business as AI reshapes how customers discover and evaluate products. A curated luxury catalog like Perigold's, with its complexity and its emphasis on craftsmanship and detail, is exactly the kind of place where these tools create outsized value, and we intend to keep leaning in. So what are we most excited about looking ahead? There are a number of exciting efforts underway, so let me share a couple examples.

We're planning to launch a Perigold loyalty program later this year, purpose-built for luxury customers. Also in stores, Houston and West Palm Beach are still early, but the underlying signals—design-driven basket sizes, strong repeat interest, growing trade engagement—give us real conviction. And our ambition over the next several years is to grow our store presence across the country's luxury markets, using the same test-and-scale approach we've used across every other part of the company.

We'll keep pushing on the fundamentals that got us here: broadening the catalog, deepening our trade offering, and continuing to raise the bar on availability, delivery speed, and service, all of which translate directly into loyalty and repeat purchases from this customer. Perigold is a great example of something Steve and I have long believed about Wayfair—that this platform can extend into new customer segments and keep compounding for years to come. It also shows the discipline we try to bring to every part of the company: grow quickly, but do it profitably, and keep reinvesting in the things that actually earn a customer's loyalty over time.

We're proud of what this team has built and even more excited about what's ahead with that. Let me hand it to Kate to walk through our financials. Kate Gulliver, CFO CAO Thanks, Neeraj, and good morning, everyone. Let's dive into our financial results for the second quarter.

3%. This was another impressive quarter of share momentum from the US, buoyed by some macro improvement. However, that macro improvement did not extend to our end markets in Canada or the UK, which both saw continued pressure on consumer sentiment and discretionary spending. Let me continue to walk down the P&L.

As I do, please note that the remaining financials include depreciation and amortization, but exclude equity-based compensation, related taxes, and other adjustments. I will use the same basis when discussing our outlook as well. 0% of net revenue. As we discussed back in May, the investments we are making into programs like Wayfair Rewards and the customer experience continue to bear fruit in the form of accelerating order capture and sustained market share outperformance.

In fact, we saw new order growth in Q2 accelerate for the fourth consecutive quarter and reach a post-COVID high. 1%. 3% for the second quarter. Selling, operations, technology, G&A expenses came in at $361 million.

We've long articulated that as we return to consistent and expanding top-line growth, you would see us hold steady our fixed cost base, and the evidence of that is right here. We've driven 100 basis points of SOTG&A leverage versus Q2 last year, which flows directly to EBITDA. 9% margin on net revenue, the best margin figure we've delivered since 2021. 6 billion of liquidity when including availability from our undrawn revolver.