Online furniture and home goods retailer Wayfair has reported soft sales in both US and international markets, but order momentum remains “strong”.

For the quarter to June 30, total net sales fell 3.4 per cent to $3.2 billion while gross profit increased 31.1 per cent to $985 million.

By segment, US net revenue fell 0.4 per cent to $2.8 billion while international sales decreased 20.9 per cent to $386 million.

Active customers reached 21.8 million as of June 30 while the average order value was $307 compared to $330 in the same period last year.

Repeat customers placed 80.1 per cent of total orders in the second quarter compared to 78.6 per cent in the corresponding period last year.

Niraj Shah CEO, co-founder and co-chairman of Wayfair, said the results highlight the success of the company’s business plan to achieve profitability.

“For the past few quarters, you’ve seen us execute against that plan – to lower our costs, focus on the basics and earn more customer and supplier loyalty.

“I’m pleased to share today that we’ve passed one of our key milestones and we are reporting positive adjusted EBITDA and positive free cash flow.”

Neil Saunders, MD of GlobalData, acknowledged the company’s efforts to reduce costs and added there is still “hope” for the retailer to produce topline performance in the future.

“The business was so badly run for so many years and has racked up so much debt, that even if progress becomes more substantial it still has a very long climb to get out of the deep financial hole it has dug itself into.

“We also have some lingering issues with the fact management tends to put an overly positive gloss on everything rather than being realistic and open about the challenges Wayfair faces.”