First, the facts: Wayfair’s financial results this week showed continuing losses (though less than last year), while sales creeped up a few ticks (though less than analysts had forecasted).

Now, the story behind the facts: The online home furnishings retailer still seems far from the sustained profitability it has long sought, left behind amid a cooling e-commerce market given its lack of a physical store presence, where all the action seems to be today. Making matters worse, the furniture and home furnishings business is weak at the moment and shows few signs of any immediate recovery. Wayfair remains caught between a rock and a soft place.

After a brief profitable spurt during the peak of the pandemic when the furniture business boomed, Wayfair has fallen back into the red. Even as the company’s ever-optimistic CEO Niraj Shah tries to keep spinning a tale of future good times, Wayfair remains a retailer in search of a successful place in the home furnishings universe.

Which is not to say there weren’t a few modest signs of improvement. Net revenue worldwide (mostly the U.S., with a small European piece) increased 3.7 percent versus a year ago. Sales just in the U.S. improved even more, up 5.4 percent. Overall revenue numbers, however, at $2.94 billion for the quarter, came in under analysts’ forecasts of $2.98 billion.

On the bottom line, Wayfair’s net loss was $163 million. That’s an improvement over the same period a year ago, when the loss was $283 million, indicating that the company is continuing to get its cost structure into better alignment with its sales. Gross margins ticked up to 31 percent against 29 percent a year ago, with its SG&A costs declining, always a good sign when it comes to the potential for profitability.

But the real story may be deeper down in the report, where the numbers are slightly less encouraging. Wayfair’s active customer head count declined 1.3 percent to 22.3 million for the quarter, and net revenue per active customer dropped 1.6 percent. The company said that while the numbers were off from a year ago, they were better than the previous quarter’s this year.

In an interesting twist we haven’t heard before, Wayfair said one of the reasons for its average order size decline was that wholesale prices are lower due to reduced freight and raw material costs, and those savings were passed along to its customers. While everything in that statement is true and other home retailers have seen similar declines, few have actually put it this way.

Shah remained positive about what’s still to come. “Wayfair is now in a place where we can drive profitability while simultaneously investing for growth,” he said in the earnings release. “Q3 is one more proof point of exactly that—today we’re reporting positive adjusted EBITDA of $100 million, a second consecutive quarter of positive free cash flow and nearly four percent year-over-year revenue growth driven by strength in orders. … Even with a turbulent macro, we remain committed to our profitability goals in good times and bad.”

Wall Street seemed willing to give Shah the benefit of the doubt, at least short-term, as the stock kicked up almost 2 percent on Wednesday to about $44 a share. That said, it is trading at barely half its midsummer level and radically off from where it was during the pandemic days of 2021, when it went as high as nearly $350 a share.

For Wayfair, those heady days have to seem like an eternity ago. Curiously, the company’s stock is almost exactly where it was in March of 2020 … right before the pandemic.

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Warren Shoulberg is the former editor in chief for several leading B2B publications. He has been a guest lecturer at the Columbia University Graduate School of Business; received honors from the International Furnishings and Design Association and the Fashion Institute of Technology; and been cited by The Wall Street Journal, The New York Times, The Washington Post, CNN and other media as a leading industry expert. His Retail Watch columns offer deep industry insights on major markets and product categories.