What happened

Shares of Wayfair (W -3.64%) soared 51.4% in value last month, according to data from S&P Global Market Intelligence.

The company delivered another impressive round of earnings results for the fourth quarter of 2018 that showed the company's strategy to dominate the home-goods market is working.

A man and woman moving a sofa in their home.


So what

Once again, Wayfair demonstrated its ability to fuel high growth rates and win over millions of customers in a competitive retail industry, particularly going up against an online juggernaut like Amazon.com. In the fourth quarter, direct retail net revenue increased 40.6% year over year to $1.9 billion, which brought full-year revenue up 45% to $6.7 billion. 

Not surprisingly, Wayfair reported a net loss of $143.8 million on the bottom line during the last quarter, which reflects management's strategy to invest in expanding the company's distribution footprint and infrastructure to beat its competitors to what management sees as a massive opportunity to disrupt the $600 billion home-goods industry. 

CEO Niraj Shah pointed to the company's blistering growth in revenue as validation of its expansion strategy: "We remain focused on our long-term approach to investing in the business and believe the company's outsize growth at scale is a testament to the strength of our brand and platform as we redefine the shopping experience in our category."

Most encouraging in the quarter was that orders placed from repeat customers made up 66.4% of total orders, up from 62.4% in the year-ago quarter. Wayfair also saw trailing-12-month revenue per customer increase 5% year over year to $443. 

These are indicators that Wayfair is offering a level of service and value that customers aren't finding anywhere else. The number of active customers increased by 37.9% year over year to reach 15.2 million at the end of the quarter. 

Check out the latest earnings call transcript for Wayfair.

Now what

Management sees an enormous opportunity to grow outside the U.S., particularly in Canada, which makes up 60% of Wayfair's international revenue. Wayfair just recently opened a new CastleGate facility in Ontario that will enable the company to lower prices and ship goods more efficiently to Canadian customers. Management expects these efforts to reaccelerate revenue growth in Canada and win market share.

Shah's comments about the international opportunity means Wayfair's momentum may not slow anytime soon: "Our offering is resonating more and more with our customers in North America and Europe, and we see clear parallels in the progress of our businesses in Canada, the United Kingdom, and Germany and the successful course of Wayfair.com in the U.S. at similar stages of development."