Dive Brief:

• Wayfair on Thursday reported third quarter net revenue grew 39% from the year-ago period to $1.2 billion and direct retail revenue rose 42% to $1.2 billion — in line with the consensus estimate of $1.21 billion cited by Streetinsider. The online home goods and furniture retailer as of Sept. 30 has 10.3 million active customers, a 39% increase from a year ago, according to a press release.

• The company’s Q3 gross profit was $280.3 million or 23.4% of total net revenue, but its GAAP net loss was $76.4 million or 88 cents per share in the quarter from $60.9 million in the year-ago period, the company said.

• The quarter’s average order value was $250, from $244 in the year-ago period, with repeat customers placing 61% of total orders. In a conference call with analysts on Thursday morning, executives pointed to the company’s 0.5% growth in net revenue per active customer over the last 12 months to $408, despite its 0.5% second-quarter slip.

Dive Insight:

Wayfair shares took a tumble Wednesday after its report of wider losses, but Tuesday morning they were in recovery, up more than 6%, in a sign that many investors will continue to be patient with the online furniture retailer and remain focused on the long term. 

"We are very pleased with the company’s strong growth and momentum as we continue to reinforce our position as a clear online leader in the massive home category," Wayfair CEO, co-founder and co-chairman Niraj Shah said in a statement, in which he emphasized supply-chain improvements that he said have increased efficiencies and boosted the customer experience.

Grilled by analysts about the company's customer acquisition costs, Shah rejected the characterization of them as "elevated," saying the retailer is seeing more repeat customers in the mix and that while those costs have remained about $65-$75, revenue per customer has risen. "Our customer unit economics continue to be very strong," CFO Michael Fleisher also said on the call. "Every dollar we’re spending is getting us a strong customer." 

Executives also emphasized that furniture e-commerce is growing in general as people get more comfortable buying those big purchases online, and that Wayfair is well positioned to take advantage of that. Indeed, online furniture sales have emerged as a major growth area in e-commerce, rising 18% in 2015, second only to grocery, according to research from Barclays. Some 15% of $70 billion in U.S. furniture sales are now online, according to IBISWorld data.

That means more competition for Wayfair, too. Target, Amazon and even Ikea — which has been slow to e-commerce — have joined Wayfair and stalwart Pottery Barn in moving to take advantage of consumers’ openness to shop for bulky furniture online.