Dive Brief:

• Wayfair on Thursday reported that fourth quarter direct sales generated through its five banners rose 48% from the same period last year, to $1.42 billion. Total net revenue in the quarter rose 46.2%, to $1.44 billion, according to a company press release.

• The number of active customers in the company's direct retail business rose 33.2% year over year to 11 million, and orders per customer reached 1.77 in Q4, compared to 1.71 in the year-ago period. Repeat customers placed 62.4% of total orders, up from to 58% a year ago.

• For the full year, direct retail net revenue rose 42.5% year over year to $4.6 billion, and total net revenue for the year rose 39.7% to $4.7 billion, the company also said. But losses widened for the quarter and the full year. Q4 gross profit was $332.2 million, or 23.1% of total net revenue, but net losses widened to $72.8 million from $43 million in the year-ago period. The full year's net loss widened to $244.6 million.

Dive Insight:

Wayfair posted healthy sales growth and improved earnings before interest, taxes, depreciation and amortization (or EBITDA). But while executives argued for the investments the company is making overseas and to its supply chain, profits continue to elude the 16-year-old online furniture and home goods retailer. Investors didn't hide their impatience after the report as shares plummeted by 23%.

The company is no doubt, as CEO Niraj Shah noted to analysts in a conference call on Thursday, grabbing market share in the U.S. as more and more customers turn online to furnish and decorate their homes.

"Shoppers vote with their dollars, and by taking a long term approach to giving them the best possible experience, we are being rewarded with continued gains in market share," he said, according to a transcript from Seeking Alpha. "The level and timing of our investment decisions is not determined by factors such as near-term revenue performance or by year end results, but purely by what it takes to serve our customer and when it makes the most sense to make that specific investment in order to best achieve our long-term ambitions."

It's not just the e-commerce growth in the sector, or even the robust housing market and a more generally healthy level of consumer confidence, that are bolstering Wayfair's top line. The furniture seller also pays close attention to its customers, according to GlobalData Retail Managing Director Neil Saunders.

"It would be unfair … to attribute Wayfair's success to external circumstances," he told Retail Dive in an email, noting that its investments have, indeed, paid off. "Wayfair's customer-centricity is another reason for its growth and one of the reasons it outperformed the market. Investments in both mobile and traditional online platforms have made it easy and fun for customers to shop for furnishings."

But the stellar top line can't hide the company's bottom line troubles. Saunders said that "the fact it has hardly ever been profitable is an ongoing cause for concern." He added that "margins remain very thin and could easily be blown off course if demand slipped."

While executives on Thursday pointed to their focus on Canada, the U.K. and Germany for overseas growth, that's unlikely the place to uncover profits, Saunders warned. Those markets would require yet more investment and "are far tougher to crack and far more competitive than the U.S.," he said.

The company is also facing more competition at home, with news that Walmart is readying a new online "home destination" with curated collections guided by design trends and in-house stylists. Nor is Walmart alone. Amazon in November launched two furniture brands, Rivet (with a mid-century modern design flair) and Stone & Beam (with a farmhouse or cottage approach). Meanwhile, Target's new "Project 62" furniture line and eclectic home brand Opalhouse are part of that retailer's renewed commitment to differentiated merchandising.