Wayfair has reported sales growth in the first quarter, an indication that the retailer continued to gain market share in the home furnishing sector.

The company’s net revenues rose 7.4 per cent to $2.9 billion in the quarter ended March 31. US net revenue grew 7.5 per cent to $2.6 billion, while international sales increased 6 per cent to $319 million (up 1.7 per cent in constant currency).

According to GlobalData MD Neil Saunders, the fact that Wayfair continued to gain market share is impressive given the scale of the business in the US. 

“Some of this is helped by new physical stores which, as well as driving sales directly, are throwing a halo around online orders in the locations where they are present. This increased visibility should, over time and with more locations, help drive down the firm’s extensive advertising expenses,” he explained.

“Some is also driven by a consumer increasingly wanting many options to find the right balance between price and quality. This greater consideration in shopping for furnishings is a direct result of a more cautious and considered consumer,” he added.

The downside in Wayfair’s results remained in the bottom line, where net loss, despite reducing 7 per cent to $105 million, is still “substantial”, according to the analyst.

“Some of this is due to restructuring and debt extinguishment, but a lot more work is needed to drive the business into the black,” Saunders said.

“The good news is that Wayfair seems to be slowly moving towards being more driven by customer retention and repeat business and away from being overly reliant on extensive customer acquisition. This is an important step on the journey to profitability, but we believe that there is still a substantial distance to the destination,” he added.