New York, Feb 19, 2026, 12:46 (EST) — Regular session
- Wayfair shares dropped roughly 10% after the company posted a fourth-quarter loss by GAAP standards.
- Management cited gains in market share, though they also warned that upcoming investment could weigh on gross margin as the year progresses.
- The company is projecting revenue growth in the mid-single digits for the first quarter.
Wayfair Inc dropped 10.4% to $81.98 Thursday, with shares swinging from $76.51 to $92.18 intraday. The online home-goods retailer reported a fourth-quarter loss under standard accounting and signaled more aggressive spending ahead in its push for market share.
This shift is significant. Wayfair’s stock surge the past year hinged on hopes that tighter costs and more reliable demand would finally deliver lasting profits. The most recent update, though, threw that narrative into question—raising the old dilemma again: chase growth and spend, or hold off and protect margins.
Home furnishings are still choppy and react quickly to rate changes, leaving investors wondering if Wayfair can keep grabbing market share without giving up profits in the process. The upcoming first-quarter outlook, typically a slower stretch, is the next hurdle.
Wayfair reported a 6.9% bump in fourth-quarter net revenue to $3.34 billion. Still, the company swung to a net loss of $116 million, or $0.89 per share. Adjusted EBITDA came in at $224 million, and adjusted diluted earnings per share landed at $0.85. CEO Niraj Shah pointed to “our third consecutive quarter of new customer growth,” noting it came during a period when the category “contracted in the low single digits” toward year-end.
Traders zeroed in on the split between adjusted profit and the GAAP loss, eyeing what it reveals about the expense of overhauling operations. Wayfair has been snapping up its own debt and putting more weight on loyalty programs and service tweaks—moves aimed at boosting order numbers, even if the short-term earnings story gets harder to read.
During the earnings call, CFO Kate Gulliver projected mid-single-digit revenue growth for the first quarter, with gross margin sitting between 30% and 31%—though she expects it to land “likely at the low end.” The contribution margin comes in around 15%, and adjusted EBITDA margin is set for 4.5% to 5.5%. Gulliver also flagged a potential dip below the 30% gross margin mark later in 2026, citing investment plans, but emphasized: “The magnitude of this will be measured in the tens of basis points, not hundreds.” (To clarify, a basis point represents one-hundredth of a percent.) Execs pointed out that Wayfair Rewards has now crossed 1 million members and detailed store openings planned for Atlanta and Denver, along with a smaller outpost coming to Columbus. (The Motley Fool)
Wayfair’s slide dragged on home-furnishing stocks, sending Williams-Sonoma down roughly 2.3% and RH off about 3.8%. The S&P 500 ETF slipped 0.3%.
Bulls face a risk: the “invest to take share” strategy could hit at a tough moment in the cycle. Should demand remain uneven and promos ramp up, Wayfair might get squeezed—slimmer margins, growth slowing. That’s a combo the market usually hits hard.
First-quarter growth appears steady, with margins hovering close to the firm’s target ranges. FactSet data shown by Business Insider indicates April 30 as the anticipated date for the next results release. (Businessinsider)
