Wayfair's Structural Growth Drivers Post-Replatforming and Organizational Restructuring
The replatforming of core systems has been completed, enabling faster development cycles.
Post-replatforming, the technology team is now focused on enhancing customer and supplier experiences, including genAI-powered features.
Organizational restructuring has optimized team structure, allowing faster execution of new programs like Wayfair Rewards, Verified, and physical stores.
Momentum is building due to these pillars, leading to increased share capture and growth.
Adjusted EBITDA was $205 million, representing a 6.3% margin on net revenue, including a 7.8% adjusted EBITDA margin in the U.S. segment.
Cash from operations was $273 million, capital expenditures were $43 million, and free cash flow was $230 million, the strongest since Q3 2020.
CastleGate penetration increased by about 400 basis points year-over-year to roughly 25%, improving logistics efficiency and customer experience.
Gross margin was 30.1% of net revenue, reflecting tactical investments and demand elasticity measurement.
Net revenue grew 5% year-over-year and 6% excluding the impact of the exit from Germany, driven by strong performance across all brands and geographies.
Selling, operations, technology, general and administrative expenses were $370 million, down roughly $30 million year-over-year.
The company ended the quarter with $1.4 billion in cash and equivalents and $1.8 billion in total liquidity.
U.S. business revenue increased over 5%, and International segment grew over 3%, with Canada, the U.K., and Ireland showing momentum.
Return to Profitability and Store Footprint Optimization
Advance Auto Parts achieved a significant milestone by returning to profitability in Q2 2025, supported by store footprint optimization and strategic initiatives.
The company has completed the closure or conversion of 9 distribution centers in the U.S. year-to-date, with a target of 12 closures by year-end.
Management emphasized that store infrastructure upgrades, including HVAC, roofing, and signage, are part of a multiyear plan to improve customer and employee experience.
The store refresh CapEx has increased threefold compared to 2024, with over 1,000 stores upgraded so far, aiming for a better in-store experience.
These operational improvements are designed to reinforce the company's turnaround and long-term growth strategy.
Dafinchi