Key takeaways:
- Wayfair reported 7.5% total net revenue growth to $3.5 billion in Q2 2026, with U.S. revenue up 8.7% year over year, the strongest U.S. growth since before COVID.
- Perigold, Wayfair’s luxury home brand, grew more than 35% in Q2 and is now generating more than $400 million in annual sales, with a path to becoming a multibillion-dollar business, according to Wayfair co-founder and CEO Niraj Shah.
- Management guided to high single-digit revenue growth in Q3, driven by organic share gains, loyalty program expansion and a rapidly growing store footprint.
The K-shaped economy, in which higher-income households recover faster and spend more freely while lower-income consumers remain under pressure, is reshaping Wayfair’s revenue mix, according to co-founder and CEO Niraj Shah.
“While there’s still some broader macro uncertainty and depressed housing turnover, by our measure, this marked the first quarter of flat to slightly positive year-over-year category growth that we’ve seen in the U.S. since 2021,” Shah said on Wayfair’s Q2 earnings call on Tuesday. “Those skewed towards higher growth in the higher income segments.”
Specialty retail brands grew nearly 20% in Q2. Perigold, Wayfair’s dedicated luxury platform, grew more than 35%. The mass Wayfair business is also growing, but the premium and luxury segments are outpacing it by a wide margin.
Total net revenue reached $3.5 billion, up $246 million from the same period in 2025. U.S. revenue climbed 8.7%, marking the best growth rate Wayfair has posted in the post-COVID period. Orders were up 6% year over year and surged more than 12% sequentially from Q1, the strongest Q2 sequential order growth since 2020.
Perigold’s Growth
When Wayfair launched Perigold in 2017, the thesis was simple, Shah said. Roughly 15 million high-income U.S. households spend more than $100 billion a year on their homes, and no digital platform was built to serve them well. Luxury brands like Century Furniture and Vanguard were locked behind trade-only showrooms or scattered across narrow single-category competitors.
Nine years later, Perigold offers close to 3.5 million products from 1,500 brands spanning every style and category. The platform now generates more than $400 million in annual sales, has grown at a double-digit rate every year since launch, and reported more than 20% growth in both 2024 and 2025 before accelerating further into 2026.
The customer profile is distinct. Perigold’s active customer base is approaching 400,000, up nearly 20% year over year. Those customers spend almost three times what a typical Wayfair.com shopper spends annually. Roughly 40% of Perigold customers are entirely new to the Wayfair family of brands each year, which means Perigold is pulling in a demographic Wayfair.com wouldn’t otherwise reach.
“The selection overlap between Perigold and Wayfair is very narrow,” Shah said. “By having both platforms, we offer customers the ability to shop the wide expanse of home under one umbrella.”
Perigold’s structural advantage is that it runs on Wayfair’s existing logistics, technology and marketing infrastructure, meaning its own investment goes almost entirely toward the things that make it distinctly luxury: curation, brand experience and service. Free white glove delivery is built into the model. Larger purchases get proactive high-touch order monitoring. Both features have driven meaningfully higher repeat rates and post-delivery satisfaction scores.
AI is also playing a growing role. Wayfair recently used a proprietary in-house AI pipeline to produce a full seasonal outdoor imagery campaign, replacing what would traditionally have cost roughly $2 million in location shoots, travel and crew costs. The AI-generated campaign cost less than $10,000, a reduction of more than 99%. The company is now extending these tools across product imagery and merchandising accuracy.
What’s Happening With Lower-Income Customers and the Mass Business
“The vast majority of our revenue is still mass,” Shah said. “The Wayfair business is a very large business, so we have exposure to all the segments.”
The promotional environment at mass hasn’t changed much, he said. Shah described it as persistently promotional for several years, driven by the need to capture attention in a category that’s been out of favor with lower-income consumers. “At a high level, it’s been a promotional environment,” he said. “It has been, and it still is.”
That said, Wayfair believes it’s taking share across all segments. New order growth in Q2 accelerated for the fourth consecutive quarter and hit a post-COVID high. The loyalty program, Wayfair Rewards, launched about 18 months ago and is compounding in its effects on repeat behavior and advertising efficiency.
Store Openings and Expanding Market Share
Physical retail is becoming a meaningful piece of Wayfair’s growth story. Following the opening of its Wilmette, Ill. store in 2024, the company opened its Atlanta store in spring 2026 and its Columbus location earlier in the summer, with Denver set to open this fall. For 2027, Wayfair has signed leases in Westchester, Fort Lauderdale, Cincinnati, Princeton and Pittsburgh.
On the Perigold side, two stores in Houston and West Palm Beach are already delivering average order values higher than the online channel, alongside strong early design-led project pipelines, Shah said. About 20% of store staff are trained designers offering complimentary design services both in-store and virtually.
More than 50% of customers in Wayfair stores are new to the company’s customer file, meaning physical retail is functioning as a genuine acquisition channel, not just a convenience for existing shoppers. CFO Kate Gulliver noted that the capital investment for these stores is primarily in the build-out, not inventory, since supplier-owned inventory sits in the stores as another distribution point. Combined capital investment across the store program is sitting in the range of low single-digit capital expenditures as a percentage of revenue.
More details on store economics and the long-term retail strategy are expected in future quarters as the company accumulates more operating data.
Tariff Refunds, Higher Oil and Freight Costs
Investors asked whether tariff refunds flowing back through the supply chain might pressure retail prices or gross margins. Management’s answer was essentially: not yet, and probably not much.
“We have not seen tariff refunds affect prices in the marketplace,” Gulliver said. Instead, suppliers appear to be using refund capital to fund new product development and build deeper inventory, not to lower prices for consumers. “When the tariffs started a year ago, we said we actually didn’t see rising prices then,” she added. “I think it tracks that we’re not going to see a sort of reinvestment in lowering prices for consumers now.”
On freight and oil, Shah acknowledged that costs are always moving parts in the business but said that Wayfair’s marketplace structure and scale help insulate consumers from volatility. Suppliers absorb much of the variability by adjusting their inventory timing, moving thinner on margin temporarily when variable costs spike and rebuilding when conditions ease.
International Revenue Declines
International revenue dipped 1.3% year over year to $394 million in Q2, as consumer sentiment in Canada and the United Kingdom remained under pressure. Shah framed the gap as a sequencing issue, not a structural one: “The loyalty program, which rolled out in the U.S. 18 months ago, only rolled out in some of the international geographies a few months ago.”
As Wayfair Rewards, Wayfair Verified and storefront experience improvements roll out across international markets, management expects the same compounding dynamic it’s seen in the U.S. to follow.
A Perigold-specific loyalty program is also in the works, purpose-built for its luxury customer base and expected to launch later in 2026.
Third-Quarter Guidance
Wayfair guided to high single-digit revenue growth in Q3, with gross margin expected to land at the lower end of a 29.5%-30.5% range. Advertising is expected at the low end of 10.5%-11.5%, with contribution margin in line with or slightly better than Q2. Adjusted EBITDA margin is guided to a 6%-7% range.
SOTG&A is projected to hold between $360 million and $370 million. Free cash flow in Q2 reached $301 million, up more than 30% year over year and the strongest quarter of cash generation since Q2 2020.
Gulliver signaled that the company is shifting its capital priorities now that its convertible bond cleanup is nearly complete. With just $39 million of 2026 bonds and $229 million of 2027 bonds remaining, Wayfair plans to move from offsetting dilution through bond repurchases to buying back its own shares directly.
