Wayfair 3Q26: Let 'em cook

Wayfair 3Q26: Let 'em cook. A 10% revenue and 16% contribution margin print, both beats, allow us to dream of further revisions, expanding share spread and strong operating leverage. 10% growth was led by the US business growing 11% Y/Y and orders growing 12%, pointing to US share spread of LDD with the US market flat. Rewards continues to be a positive contributor, with member growth and spend levels encouraging, and the program is unlocking higher gross profit dollars on member cohorts. Stores should be an incremental contributor to growth next year. Contribution margin of 16% was led by advertising cost at 9.9% of net sales, though there was a timing benefit and the implied Q4 contribution margin looks to be a more normal 15%. SOTG&A had a $7M one-time UK CMA charge and should return to $360-370M in Q4. We raise revenue 1% and EBITDA 4%, roll forward to 2028 as our base year, taking our PT to $140 (+$15). Remain Outperform.