Overstock Q3 Sales Drop But Loss Improves

As it shifted gears to a focus on profitability rather than market share, Overstock cut its year over year losses in the third quarter although sales declined significantly as a result.

The company’s net loss for the quarter was $30.9 million, or 89 cents per diluted share, versus a net loss of $47.9 million, or $1.55 per diluted share, in the year-prior period. An analyst consensus estimate published by MarketBeat called for a company loss per diluted share of 70 cents.

Net revenues were $347.1 million with retail revenue coming in at $340.8 million versus $440.6 million and $435.8 million, respectively, in the year-previous quarter. Operating loss was $30.1 million as compared to $47.8 million in the period a year before.

According to Overstock, the decrease in revenues arose primarily because of lower product sales. The drop in product-related revenue resulted from a significant reduction in sales and marketing activities as part of the company’s effort to return to retail profitability. In addition, Overstock asserted, revenues took a hit from increased tariffs on goods manufactured in China, search traffic taking longer than expected to translate into purchasing customers, waning consumer confidence, decreasing conversion on high dollar purchases industry wide and other more general decreases in conversion.

“The results of our third quarter were in line with our revised guidance,” said Overstock CEO Jonathan Johnson. “Our retail business continues its path to sustained profitability, despite a few external headwinds, thanks to the focused leadership of an executive team with a proven track record of success. tZERO continues to reach milestones on its product roadmap, which is no small feat in the highly regulated capital markets environment. Other Medici Ventures companies are bringing their products into production and increasing their leads in their respective verticals.”