By Kelly Cloonan

Wayfair warned that its margin could dip later this year as the furniture retailer looks to accelerate market-share gains, investing further in areas like its rewards program.

The company guided for gross margin toward the low end of a range of 30% to 31% for the current quarter, in line with its recent results. However, the company said it could see the metric falling later this year as it ramps up some investments.

"We expect there will be opportunities for us to dip gross margins slightly below 30%, as we look to capture share at a faster rate," Chief Financial Officer Kate Gulliver said during a call with analysts.

The company pointed to plans to grow its loyalty program, which launched in 2024. Members enrolled in the program tend to spend more than non-members, and now drive more than 15% of Wayfair's U.S. revenue, Chief Executive Niraj Shah said.

Shah said he expects that investing in the program will fuel further top-line growth this year. The company plans to expand the program with launches in Canada and the U.K. in the coming months, and will roll out a specialized rewards offering for luxury customers with its Perigold brand later this year, he said.

"We're expecting to add even more members in 2026 than we did in 2025, as rewards provides one of the many pistons powering our engine of growth this year," he said.

For the current quarter, Wayfair also guided for mid-single-digit revenue growth. Analysts polled by FactSet were looking for an increase of about 6%.

The Boston company's shares slid 10%, to $82.26, on Thursday. The stock has gained 78% in the past year.

The outlook came as the company posted a narrower loss in its latest quarter, driven by growth in the U.S., though active customers were weaker than expected.

Wayfair posted a fourth-quarter loss of $116 million, or 89 cents a share, compared with a loss of $128 million, or $1.02 a share, a year earlier.

Adjusted earnings per share were 85 cents, compared with an expectation of 69 cents a share according to analysts polled by FactSet.

Revenue rose 6.9%, to $3.34 billion. Analysts expected $3.3 billion. Excluding the effect of the company's exit from the German market, revenue rose 7.8% year over year.

The U.S. business recorded revenue of $2.9 billion, up 7.4% year over year. International revenue rose 3.7% year over year, to $395 million.

Active customers fell 0.5%, to 21.3 million, compared with analysts' estimates of 21.5 million. The company delivered 11.1 million orders during the quarter, a 3.7% increase year over year.

Write to Kelly Cloonan at kelly.cloonan@wsj.com

(END) Dow Jones Newswires

February 19, 2026 12:28 ET (17:28 GMT)

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