Wayfair (NYSE:W) has benefited from the fact that many people are buying home furnishings online during the COVID-19 pandemic.

Even as the economy reopens, Wayfair's momentum will likely be here to stay after attracting millions of new customers during nationwide lockdowns. The consumer discretionary company also has a record of strong performance during recessions. Shares are up 127% year to date and may have even more room to run.

A sofa, armchair, table, ottoman, standing lamp, and other furniture arranged in a living room.

Image Source: Wayfair

Thriving in the "stay-at-home" economy

Wayfair's first-quarter earnings results beat consensus expectations. From January through March, revenue growth was in the high teens. The company saw a nice lift in new customer orders, traffic, and conversion in mid-March as people began to shelter at home due to COVID-19.

Business actually received a boost both from shoppers staying at home and from the fact that many competitors had to shutter their stores due to the pandemic. CEO Niraj Shah commented on the earnings call that the stay-at-home shift "led to new needs for essential products like cookware and kitchen appliances, home office products, and children's furniture and play items, and also brought to light ongoing renovation and decoration projects that customers are now taking on."

Shah also noted, "We have seen gross sales momentum build across almost all classes of goods across mobile and desktop platforms and across all regions in the U.S., Canada, the U.K., and Germany."

The momentum has continued into the second quarter. One research analyst estimates that the company has added about 10 million new customers in the second quarter, and with repeat purchases from these newly converted shoppers, that bodes well for Wayfair's future growth.

In fact, through the first five weeks of the second quarter, top line growth was up about 90% year over year, or an additional $800 million in constant currency sales.

Well-positioned despite continuing uncertainty

Although some regions are gradually reopening, individuals are still holding off on travel and leisure activities due to health concerns. From sports arenas to movie theaters, many entertainment venues are still closed. 

These closures and the resulting economic disruptions aren't worrying for Wayfair, which has done well during past slowdowns. The company outperformed during the financial crisis of 2007 to 2009 when its revenue increased even as the total addressable market shrunk by 30%. E-commerce adoption fueled results during that time. 

The household goods retailer will likely see steady business this year, because consumers are shifting spending away from travel and entertainment into their homes. The home improvement sector has held strong during the pandemic, according to research firm Placer.ai. Home Depot, for example, saw weekly visits increase 31.3% above the baseline for the week of April 20.

Given Wayfair's impressive performance during the recent crisis, investors seeking a strong retailer should look to Wayfair stock as a solid bet.