Furniture retailer Wayfair’s third-quarter net loss narrowed as revenue grew on the back of strong performance in the US, however, impacted by lower overseas sales.

The company’s net loss stood at $163 million during the three months ended September 30, an improvement of 42.4 per cent from the comparable period a year ago.

Revenue rose 3.7 per cent to $2.9 billion as US net revenue increased 5.4 per cent to $2.6 billion while international net revenue fell 7 per cent to $372 million.

“This partly reflects the relative economic strength of the US, but it is also a function of the weaker visibility of Wayfair in overseas markets, and the stronger competition it faces from rivals,” said Neil Saunders, MD at GlobalData.

“In our view, international operations should now be reviewed as we see them as both a drag on performance and as a business with some significant medium-term challenges.”

Wayfair said that it received 9.9 million orders during the period, up 13.8 per cent from last year, despite its active customers decreasing 1.3 per cent to 22.3 million.

“At the end of the day, while we can see signs of progress, we are still not convinced that Wayfair has a business model that works,” said Saunders.

“This full fiscal year will be one of continued high losses, and the next brings further challenges both from the wider economic environment and from much tougher competition as some other home players like Ikea move into expansion mode.”

For the first nine months of the financial year, Wayfair’s net loss narrowed 42.4 per cent to $564 million while revenue fell 2.5 per cent to $8.9 billion.

“Even with a turbulent macro, we remain committed to our profitability goals in good times and bad. We will continue to drive peerless focus and execution into 2024 and beyond, as we push every day to be the number one shopping destination for the home,” said Niraj Shah, CEO, co-founder, and co-chairman at Wayfair.