Why Wayfair Stock Gained 15% in January

What happened

Home furnishings e-commerce specialist Wayfair (NYSE: W) beat the market last month, rising 15% compared to a 6% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.

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The boost sent shares to new highs, with the stock having gained over 300% since early 2015.

So what

January's rally came as investors grew more confident that Wayfair enjoyed solid sales growth over the critical holiday shopping season. We know, for example, that revenue spiked by 53% during the five-day weekend period following Thanksgiving. That demand bounce was powered by thousands of orders for bulky merchandise, Wayfair said, including pool tables, hot tubs, and even a single 3,900-pound delivery of a storage shed.

A customer enters his credit card information in a laptop.

Image source: Getty Images.

Rival Amazon.com reported booming sales for the quarter, too. It sold 35% more products this past holiday season, despite its already massive revenue base.

Now what

It's good news for the business that customers are getting comfortable with shopping for their home furnishings, including things like sofas and dining tables, online. But investors will find out whether Wayfair was able to deliver these products efficiently, and at a profit, when it announces its full fourth-quarter results on Thursday, Feb. 22.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and Wayfair. The Motley Fool has a disclosure policy.