October 29, 2025 • 12 mins
Wayfair shares rose to their highest level since April 2022, after the e-commerce home furnishing retailer reported third quarter results that easily topped expectations. On the earnings call, management gave guidance for the current quarter that also topped consensus estimates, and spent much of the call discussing its efforts to leverage artificial intelligence technology.
Kate Gulliver, Wayfair's CFO and CAO, discusses her company's long-term prospects for increasing its share of the $500 billion home-goods market with Carol Massar and Tim Stenovec on Bloomberg Businessweek Daily.
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News. You're listening to Bloomberg
Business Week with Carol Masser and Tim Steneveek on Bloomberg Radio.
Speaker 2 (00:14):
We're thinking a lot about the US economy. We do
get a FED decision. Twenty four hours from now. We
will have that FED decision and we are expecting a
rate cup. But we wanted to talk a little bit
more about the economy and do it through the lens
of Wayfair. Those shares are surging as much as twenty
four percent higher in today's session, The stock trading near
the days high even at this hour, which is the
(00:36):
highest level since April of twenty twenty two. The e
commerce home furnishing retailer reported net revenue and adjusted IBITA
for the third quarter that easily topped expectations.
Speaker 1 (00:47):
Tim, we've got Kate Goliber, chief financial officer of Wayfair,
back with us. She joins us from Boston. Kate, good
to have you back on the program. Thanks for joining us.
Investors certainly loving the update on the business. How is
business How is it kicking off in this final quarter?
Speaker 3 (01:02):
Yeah, you know, thank you for having me back. Happy
to be here. We're obviously quite pleased with the third
quarter results and the subsequent reaction to them, and I
do think it shows, you know, all the work that
we've been building to over the last few years and
the enduring strength in the model. And so you saw
that top line come in pretty nicely at eight percent
nine percent adjusted for the German business, and that really
(01:25):
is compounding share gains there on the top line, and
that of course flowed through quite nicely to adjusted EPATA gains.
Speaker 2 (01:30):
How would you describe the consumer?
Speaker 3 (01:33):
Yeah, you know, it still remains for us that the
consumer is quite focused on promotional events and so she,
you know, our consumers typically a woman, you know, mass
market and she needs those promotional events to really come
in off the sidelines and get excited to shop. We've
talked in the past about, you know, how the promotional
(01:54):
events really work as a marketing banner to get someone
interested in the category and to then bring them in
into the site. And that is still the case. Those
promotional events are pretty necessary to get the consumer engaged
and excited. We do see relatively more strength than that
higher end consumer for us, that's consumers that are transacting
on our Paragold site, which is our luxury brand or
(02:16):
specialty retail brands. We've said that those are actually growing
at a faster rate than the corewayfare dot com business.
And you are seeing more strength in that consumer segment.
Speaker 1 (02:26):
Are you are talked about promotions? You mentioned them. You
have to get consumers excited? Do you have to get
them more excited now than you did any other part
of this year. We're really trying to understand the economic
environment out there.
Speaker 3 (02:38):
You know what's interesting is this category in particular has
been down for so long. So the category you know,
obviously boom during COVID and then at a pretty significant
significant pullback twenty two, twenty three, twenty four. So throughout
you know, twenty four and twenty five for this category,
promotions have been critical. You know, I would say what
(03:00):
we have seen, you know really throughout twenty five is
there's also been some mix shift dynamics. In addition to
sort of higher end consumer and mass market consumer, you
do see consumers that are shopping or shopping for, you know,
things like decorative accents, decoor, you know, maybe things with
a lower ticket than you know, buying a new couch
(03:20):
or a new chair. And I think that's the idea
someone wants to refresh and is excited about that, but
they want to be mindful of how much they're spending,
and so they're looking for the smaller pieces maybe opposed
to the big piece.
Speaker 2 (03:31):
Well, you know, to that point, you know, Kate, I
think about the pandemic. We realize that's the anomaly. I mean,
I'm looking at your stock is up one hundred and
forty two percent this year, which is quite a run,
but it's still down about sixty nine percent from twenty
twenty one. We know everyone was at home spending on
their home. That's why people were working at at home,
(03:51):
spending on their pets. There was a lot of stuff
going on. So I am curious about when you look
at the third quarter growth, how much came from intrinsic
sh capture versus category stabilization, because it does sound like
we're seeing a lot of stabilization here.
Speaker 3 (04:05):
It's a great question. We think the category itself is
roughly flat to slightly down. So I do think the
category has stabilized, and we see now we look at
a variety of different data sources, and you know, they're
all slightly different, but they coalesce around a flatish category.
This is in contrast to last year where the category
was down maybe you know, mid single digits to high
(04:26):
single digits. So that's certainly an improvement, but we don't
yet see the category as having returned to growth. So
when we look at sort of eight percent growth, right,
that's definitely US gaining share on a category that is
say flatish.
Speaker 1 (04:40):
When consumers are buying from Wayfair, are they buying to
replace stuff or is this trade up activity? Is what
is the data telling us or telling you?
Speaker 3 (04:50):
Yeah, that's a that's a great question. We're certainly starting
to you know, hear that a bit from folks. You know,
have we hit replacement cycles? And really to the conversation
we were having around pandemic, it speaks to so much
of the pull forward and demand that happened during that
pandemic period. You know, I think we see a few
things that drive you know, purchase events. One is moving
(05:12):
and obviously that part of the category has still been
you know, quite suppressed. One would be life cycle changes.
So you know, your kid, you had a baby and
now they're moving into a toddler bed, or the kids
leaving the home and you're turning their betterment into an office.
So sort of as your life cycle evolves, regardless of
if you're moving. And then a third would be you know,
replacement categories or sort of you know, juging up your
(05:33):
room in replacement cycles. I think a lot of folks
are eager to see if you know, what was bought
in twenty twenty and twenty twenty one needs to be
replaced at this time. And I think what's helpful to
understand there is it's just very category by category specific.
So if you bought you know, opening price point outdoor
furniture and you live in the northeast, maybe five years
(05:54):
is you know, an appropriate timeframe. But if you bought
a you know, nice couch, you know you're certainly not
hitting the replacement cycle on that yet.
Speaker 2 (06:03):
I got to say, I love Jijing. I love buying pillows,
but I'm afraid if I bring any more pillows home,
my husband's going to divorce me because he's like, I
can't even fire is bad. I can't find the bed anymore. Hey, listen,
you talk Kate about the higher end brands like Paragold.
You're seeing some strengths certainly in that area. I am
curious to about your retail expansion, the physical store retail
expansion or your loyalty program, if that's adding incremental customers
(06:27):
versus shifting existing digital ones. What are you seeing on
that front?
Speaker 3 (06:32):
Yeah, great question. So on the physical retail side, we
are adding incremental customers. We're actually seeing in our first
large format Wayfare store that's been open for a little
over a year now, more than fifty percent of the
folks who are transacting in that store are actually new
to the customer file. We have a one hundred million
customer file right so to be getting new customers at
(06:52):
this stage is pretty exciting. So it's definitely acting as
a way into the brand Paragold. We actually just opened
two stores for Paragold, so we open one in Houston
in the spring or of early summer, and then we
just opened in West Palm Beach in Florida a week ago.
So it's very early days on those stores, but we
do think that they should work as a nice customer
acquisition channel. The loyalty program, which is about a year old,
(07:16):
I would say that's acting more for existing customers to
get them to be increasingly sticky with us. So what
we're seeing from loyalty customers is nice incrementality, meaning you know,
if they were going to purchase you know, six or
eight times a year, and maybe they were buying one
to two from us. Hopefully we're getting that next purchase
that's second or third purchase as well. Now, Kate on.
Speaker 1 (07:36):
The layoffs that we've heard from other companies just in
recent days, Amazon planning to eliminate roughly fourteen thousand corporate jobs.
This as Andy jasse Warren that AI will shrink the
company's workforce. You have a twenty five hundred person tech team.
How are you thinking about headcount? Are you re allocating
headcount TOWARDAI applications or are productivity gains allowing you to
(07:56):
do more with a similar cost base. What are the
numbers there?
Speaker 3 (08:00):
Yeah, it's a great question. Actually, our CTO, Fionn A
Tan was on our earnings called this morning speaking to
some of what we're seeing from AI, both on the
top line perspective and where we're going with you know, personalization,
but also on you know efficiency. Every employee in the company,
not just in tech, is actually enabled with AI, you
know tools and AI resources, and right now what we're
(08:20):
seeing is really nice you know efficiency and enhancements to
individual employee work. And then in different pockets throughout the company,
including within tech. You know, as we use more specialized
AI tools, you see, you know, uptick and efficiency there.
I frequently actually talk about our legal team, so not
a tech team, but a team that you know, has
been able to adopt AI quite rapidly for document review
(08:42):
and the ability for them to sort of manage, for example,
increase lease load as we've been expanding the physical retail
network without having to add incremental folks has been pretty impressive,
and so we certainly are seeing gains, you know, from
that efficiency.
Speaker 2 (08:55):
Internally, Hey, do you feel like, though, in this environment
that you want to be lean and mean? I mean,
I guess I feel like all companies want to be
lean and mean, Kate, But I do wonder if you're seeing,
you know, as you look down the road, we are
in this funny environment funny not funny, haha, but funny
difficult in that with the government shutdown, we're not getting data.
So we're trying to figure out by talking to folks
like you, where we are in our economy. So do
(09:19):
you feel like there's pressure to be leaner and meaner?
Then maybe I don't know a month ago or so,
or you feel more confident about what's kind of coming
down the road here.
Speaker 3 (09:29):
You know, I think you firmed it well Carolin, who
said you should always feel, you know, the importance of
being lean. I mean, we're a mass market retailer, right.
We operate on basis points of margin, so we absolutely
need to be men highly focused on cost at all times,
regardless of the macro that we're operating in. And over
the last several years you saw us go through a
number of restructurings frankly to bring down that overhead cost
(09:51):
pretty significantly. Our most recent restructuring was actually March of
this year, or to the conversation on tech employees, we
did lay off some of our tech team as we
completed our replatforming exercise, and we're able to actually increase
some efficiency on that team point in more of those resources,
you know, towards AI et cetera, as they have stayed. So,
you know, we continue to be quite focused on efficiency
(10:12):
and efficiency gains. We feel good about, you know, where
the team is right now and the efficiency that we're
seeing from that operating team. But that comes on the
heels of you know, several rounds of restructuring over the
last twenty four months.
Speaker 1 (10:23):
Well on AI on the consumer side, when it comes
to AI, I'm wondering about the traction from use and
decorify the decorating platform the new pilot. How has that
been with shoppers so far? Is it driving broader consumer
adoption of AI lead design?
Speaker 3 (10:39):
Yeah, so we've tested out a number of AI you
know tooling as it relates to how the consumer can
experience our website. We offer millions of different skews across
thousands of suppliers, across a wide range of styles. So
the holy grail is really personalization. And how do you know,
all three of us maybe searching for you know, tho
(11:00):
throw pillows for the bed that Carol was talking about,
and we all may have a different aesthetic, So how
do we land on the site and get to our
aesthetic as fast as possible? To glorify And now we
have a tab on the app called Discover. These are
ways for individuals to sort of browse and engage in
a way that should be more personalized for them, and
we do see great engagement there, but even on the
(11:21):
main part of the app, so not using one of
these specialized tools or the main part of the website
we were using generative AI to make that experience better.
We spoke on the call this morning about combining generative
AI from a merchandising perspective with actually human designers, and
for folks that landed on those SKUs that were the
combo of the boat, we saw a third uplift and
(11:45):
sort of engagement with that skw That's really exciting because
that means that sku is probably far more relevant to
you than where you were going to land before.
Speaker 2 (11:51):
All Right, great stuff is always great read on what's
going on in retail and certainly the consumer. Kate, thank you,
Thank you, Kate Gulliver, our chief financial officer of Wayfair,
Bloomberg Audio Studios, Podcasts, radio News. You're listening to Bloomberg
Business Week with Carol Masser and Tim Steneveek on Bloomberg Radio.
Speaker 2 (00:14):
We're thinking a lot about the US economy. We do
get a FED decision. Twenty four hours from now. We
will have that FED decision and we are expecting a
rate cup. But we wanted to talk a little bit
more about the economy and do it through the lens
of Wayfair. Those shares are surging as much as twenty
four percent higher in today's session, The stock trading near
the days high even at this hour, which is the
(00:36):
highest level since April of twenty twenty two. The e
commerce home furnishing retailer reported net revenue and adjusted IBITA
for the third quarter that easily topped expectations.
Speaker 1 (00:47):
Tim, we've got Kate Goliber, chief financial officer of Wayfair,
back with us. She joins us from Boston. Kate, good
to have you back on the program. Thanks for joining us.
Investors certainly loving the update on the business. How is
business How is it kicking off in this final quarter?
Speaker 3 (01:02):
Yeah, you know, thank you for having me back. Happy
to be here. We're obviously quite pleased with the third
quarter results and the subsequent reaction to them, and I
do think it shows, you know, all the work that
we've been building to over the last few years and
the enduring strength in the model. And so you saw
that top line come in pretty nicely at eight percent
nine percent adjusted for the German business, and that really
(01:25):
is compounding share gains there on the top line, and
that of course flowed through quite nicely to adjusted EPATA gains.
Speaker 2 (01:30):
How would you describe the consumer?
Speaker 3 (01:33):
Yeah, you know, it still remains for us that the
consumer is quite focused on promotional events and so she,
you know, our consumers typically a woman, you know, mass
market and she needs those promotional events to really come
in off the sidelines and get excited to shop. We've
talked in the past about, you know, how the promotional
(01:54):
events really work as a marketing banner to get someone
interested in the category and to then bring them in
into the site. And that is still the case. Those
promotional events are pretty necessary to get the consumer engaged
and excited. We do see relatively more strength than that
higher end consumer for us, that's consumers that are transacting
on our Paragold site, which is our luxury brand or
(02:16):
specialty retail brands. We've said that those are actually growing
at a faster rate than the corewayfare dot com business.
And you are seeing more strength in that consumer segment.
Speaker 1 (02:26):
Are you are talked about promotions? You mentioned them. You
have to get consumers excited? Do you have to get
them more excited now than you did any other part
of this year. We're really trying to understand the economic
environment out there.
Speaker 3 (02:38):
You know what's interesting is this category in particular has
been down for so long. So the category you know,
obviously boom during COVID and then at a pretty significant
significant pullback twenty two, twenty three, twenty four. So throughout
you know, twenty four and twenty five for this category,
promotions have been critical. You know, I would say what
(03:00):
we have seen, you know really throughout twenty five is
there's also been some mix shift dynamics. In addition to
sort of higher end consumer and mass market consumer, you
do see consumers that are shopping or shopping for, you know,
things like decorative accents, decoor, you know, maybe things with
a lower ticket than you know, buying a new couch
(03:20):
or a new chair. And I think that's the idea
someone wants to refresh and is excited about that, but
they want to be mindful of how much they're spending,
and so they're looking for the smaller pieces maybe opposed
to the big piece.
Speaker 2 (03:31):
Well, you know, to that point, you know, Kate, I
think about the pandemic. We realize that's the anomaly. I mean,
I'm looking at your stock is up one hundred and
forty two percent this year, which is quite a run,
but it's still down about sixty nine percent from twenty
twenty one. We know everyone was at home spending on
their home. That's why people were working at at home,
(03:51):
spending on their pets. There was a lot of stuff
going on. So I am curious about when you look
at the third quarter growth, how much came from intrinsic
sh capture versus category stabilization, because it does sound like
we're seeing a lot of stabilization here.
Speaker 3 (04:05):
It's a great question. We think the category itself is
roughly flat to slightly down. So I do think the
category has stabilized, and we see now we look at
a variety of different data sources, and you know, they're
all slightly different, but they coalesce around a flatish category.
This is in contrast to last year where the category
was down maybe you know, mid single digits to high
(04:26):
single digits. So that's certainly an improvement, but we don't
yet see the category as having returned to growth. So
when we look at sort of eight percent growth, right,
that's definitely US gaining share on a category that is
say flatish.
Speaker 1 (04:40):
When consumers are buying from Wayfair, are they buying to
replace stuff or is this trade up activity? Is what
is the data telling us or telling you?
Speaker 3 (04:50):
Yeah, that's a that's a great question. We're certainly starting
to you know, hear that a bit from folks. You know,
have we hit replacement cycles? And really to the conversation
we were having around pandemic, it speaks to so much
of the pull forward and demand that happened during that
pandemic period. You know, I think we see a few
things that drive you know, purchase events. One is moving
(05:12):
and obviously that part of the category has still been
you know, quite suppressed. One would be life cycle changes.
So you know, your kid, you had a baby and
now they're moving into a toddler bed, or the kids
leaving the home and you're turning their betterment into an office.
So sort of as your life cycle evolves, regardless of
if you're moving. And then a third would be you know,
replacement categories or sort of you know, juging up your
(05:33):
room in replacement cycles. I think a lot of folks
are eager to see if you know, what was bought
in twenty twenty and twenty twenty one needs to be
replaced at this time. And I think what's helpful to
understand there is it's just very category by category specific.
So if you bought you know, opening price point outdoor
furniture and you live in the northeast, maybe five years
(05:54):
is you know, an appropriate timeframe. But if you bought
a you know, nice couch, you know you're certainly not
hitting the replacement cycle on that yet.
Speaker 2 (06:03):
I got to say, I love Jijing. I love buying pillows,
but I'm afraid if I bring any more pillows home,
my husband's going to divorce me because he's like, I
can't even fire is bad. I can't find the bed anymore. Hey, listen,
you talk Kate about the higher end brands like Paragold.
You're seeing some strengths certainly in that area. I am
curious to about your retail expansion, the physical store retail
expansion or your loyalty program, if that's adding incremental customers
(06:27):
versus shifting existing digital ones. What are you seeing on
that front?
Speaker 3 (06:32):
Yeah, great question. So on the physical retail side, we
are adding incremental customers. We're actually seeing in our first
large format Wayfare store that's been open for a little
over a year now, more than fifty percent of the
folks who are transacting in that store are actually new
to the customer file. We have a one hundred million
customer file right so to be getting new customers at
(06:52):
this stage is pretty exciting. So it's definitely acting as
a way into the brand Paragold. We actually just opened
two stores for Paragold, so we open one in Houston
in the spring or of early summer, and then we
just opened in West Palm Beach in Florida a week ago.
So it's very early days on those stores, but we
do think that they should work as a nice customer
acquisition channel. The loyalty program, which is about a year old,
(07:16):
I would say that's acting more for existing customers to
get them to be increasingly sticky with us. So what
we're seeing from loyalty customers is nice incrementality, meaning you know,
if they were going to purchase you know, six or
eight times a year, and maybe they were buying one
to two from us. Hopefully we're getting that next purchase
that's second or third purchase as well. Now, Kate on.
Speaker 1 (07:36):
The layoffs that we've heard from other companies just in
recent days, Amazon planning to eliminate roughly fourteen thousand corporate jobs.
This as Andy jasse Warren that AI will shrink the
company's workforce. You have a twenty five hundred person tech team.
How are you thinking about headcount? Are you re allocating
headcount TOWARDAI applications or are productivity gains allowing you to
(07:56):
do more with a similar cost base. What are the
numbers there?
Speaker 3 (08:00):
Yeah, it's a great question. Actually, our CTO, Fionn A
Tan was on our earnings called this morning speaking to
some of what we're seeing from AI, both on the
top line perspective and where we're going with you know, personalization,
but also on you know efficiency. Every employee in the company,
not just in tech, is actually enabled with AI, you
know tools and AI resources, and right now what we're
(08:20):
seeing is really nice you know efficiency and enhancements to
individual employee work. And then in different pockets throughout the company,
including within tech. You know, as we use more specialized
AI tools, you see, you know, uptick and efficiency there.
I frequently actually talk about our legal team, so not
a tech team, but a team that you know, has
been able to adopt AI quite rapidly for document review
(08:42):
and the ability for them to sort of manage, for example,
increase lease load as we've been expanding the physical retail
network without having to add incremental folks has been pretty impressive,
and so we certainly are seeing gains, you know, from
that efficiency.
Speaker 2 (08:55):
Internally, Hey, do you feel like, though, in this environment
that you want to be lean and mean? I mean,
I guess I feel like all companies want to be
lean and mean, Kate, But I do wonder if you're seeing,
you know, as you look down the road, we are
in this funny environment funny not funny, haha, but funny
difficult in that with the government shutdown, we're not getting data.
So we're trying to figure out by talking to folks
like you, where we are in our economy. So do
(09:19):
you feel like there's pressure to be leaner and meaner?
Then maybe I don't know a month ago or so,
or you feel more confident about what's kind of coming
down the road here.
Speaker 3 (09:29):
You know, I think you firmed it well Carolin, who
said you should always feel, you know, the importance of
being lean. I mean, we're a mass market retailer, right.
We operate on basis points of margin, so we absolutely
need to be men highly focused on cost at all times,
regardless of the macro that we're operating in. And over
the last several years you saw us go through a
number of restructurings frankly to bring down that overhead cost
(09:51):
pretty significantly. Our most recent restructuring was actually March of
this year, or to the conversation on tech employees, we
did lay off some of our tech team as we
completed our replatforming exercise, and we're able to actually increase
some efficiency on that team point in more of those resources,
you know, towards AI et cetera, as they have stayed. So,
you know, we continue to be quite focused on efficiency
(10:12):
and efficiency gains. We feel good about, you know, where
the team is right now and the efficiency that we're
seeing from that operating team. But that comes on the
heels of you know, several rounds of restructuring over the
last twenty four months.
Speaker 1 (10:23):
Well on AI on the consumer side, when it comes
to AI, I'm wondering about the traction from use and
decorify the decorating platform the new pilot. How has that
been with shoppers so far? Is it driving broader consumer
adoption of AI lead design?
Speaker 3 (10:39):
Yeah, so we've tested out a number of AI you
know tooling as it relates to how the consumer can
experience our website. We offer millions of different skews across
thousands of suppliers, across a wide range of styles. So
the holy grail is really personalization. And how do you know,
all three of us maybe searching for you know, tho
(11:00):
throw pillows for the bed that Carol was talking about,
and we all may have a different aesthetic, So how
do we land on the site and get to our
aesthetic as fast as possible? To glorify And now we
have a tab on the app called Discover. These are
ways for individuals to sort of browse and engage in
a way that should be more personalized for them, and
we do see great engagement there, but even on the
(11:21):
main part of the app, so not using one of
these specialized tools or the main part of the website
we were using generative AI to make that experience better.
We spoke on the call this morning about combining generative
AI from a merchandising perspective with actually human designers, and
for folks that landed on those SKUs that were the
combo of the boat, we saw a third uplift and
(11:45):
sort of engagement with that skw That's really exciting because
that means that sku is probably far more relevant to
you than where you were going to land before.
Speaker 2 (11:51):
All Right, great stuff is always great read on what's
going on in retail and certainly the consumer. Kate, thank you,
Thank you, Kate Gulliver, our chief financial officer of Wayfair,
Hosts And Creators
Tim Stenovec
Carol Massar
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