Wayfair (W) has been a very painful short over the past few weeks. After bottoming in the 20s, the stock has just kept on running up into the triple digits and, recently, reached a high of over $180 after earnings. While I believe this run-up is overdone, I can't really deny the fact that Wayfair has fundamentally performed much better than I expected; therefore, I have closed my short and I am watching from the sidelines for now.

Before I analyze Wayfair's results, I would like to mention something. This quarter doesn't include the impact of the layoffs in February, so as bad as the adjusted EBITDA margin is, it should improve in future quarters.

Now, with that in mind, let us look at the results, which look quite disappointing initially. While revenues beat expectations, both US and international showed a growth slowdown, with international showing a far larger slowdown.

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