Home & Kitchen brands grew traffic 4.5% in 2025 but conversion dropped 0.56pp. Price increases of 10.9% couldn't offset margin compression of 3.26pp. Operating margins hit negative 9% in November. The data reveals where revenue growth masked profitability problems.
More traffic, worse conversion. Higher prices, thinner margins. Download the report.
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Key takeaways
Traffic growth didn't translate to conversion: Glance views increased 4.5%, but fewer shoppers completed purchases (conversion down 0.56pp), indicating friction in the purchase path or weakened product-market fit
Price gains came at margin's expense: ASP rose 10.9% while discounting fell 2.25pp, yet unit margins dropped 3.26pp as cost inflation outpaced pricing power
Fulfillment improved but Q4 exposed gaps: Fill rates jumped 11.6pp YoY, reaching 85% in March, but dropped to 69% in November when it mattered most
Inventory was higher but not better aligned: On-hand stock rose 16.3% YoY, yet OOS dollar loss increased 13.5%, proving that volume doesn't equal precision
Paid media got slightly more efficient: ROAS improved 6.7% despite CPC rising 2.4%, showing optimization gains, but ad spend still grew 4.9% to maintain position
Profitability collapsed in Q4: Margins peaked at 18% in January but fell to negative 9% in November, exposing the true cost of holiday fulfillment and promotional activity
