Overstock.com Records Q1 Loss Despite 4.5% Revenue Gain

May 5, 2017  by Larry Thomas in Economic News, Industry   

The net loss totaled $5.9 million or 23 cents per share. In last year’s first quarter, the company had a profit of $13.4 million or 53 cents per share, but that included a one-time gain of $19.5 million from settlement of a legal dispute.

Overstock founder and CEO Patrick Byrne said the retail business had a pre-tax profit of $1.4 million and “remains fundamentally sound.” But its Medici business, which develops blockchain technology, had a pre-tax loss of $8 million.

“However, I remain confident that we are doing the right thing for our shareholders by having Medici pursue a position of global leadership in blockchain technology,” he said.

He said the retail business had a 10% increase in the average order size, and gross margin grew to 20.1% from 18.7% due to increased sales of higher-margin home and garden products.

“We continue to seek opportunities for growth, in our retail business and through our Medici blockchain and financial technology initiatives and through other means. As a result of these initiatives, we may continue to incur additional expenses or make investments in, or acquisitions of other technologies and businesses,” Byrne added. “We also anticipate that our Medici initiatives will incur losses in the near term. These losses, additional expenses, acquisitions or investments may be material, and, coupled with the seasonality of our business, may lead to reduced consolidated income or losses in some periods, and to reduced liquidity.”

He said Overstock is also considering other alternatives for Medici, including a divestiture or raising additional capital.