Overstock Reports Fourth Quarter and End-of-Year Results

February 22, 2023  by HFBusiness Staff in Business Strategy, Industry   

“The team maintained strong operational discipline and delivered another quarter and year of positive adjusted EBITDA while navigating shifting consumer demand and a highly promotional competitive environment,” said Overstock CEO Jonathan Johnson.

Operating losses for the quarter were $3 million, with a net loss of $16 million. There was a diluted net loss per share of $0.34; adjusted diluted net loss per share (non-GAAP) was $0.04.

“Revenue declined 30% for the year,” Johnson continued, “driven by the weak macroeconomic backdrop that impacted consumer sentiment and our strategic actions to become a prominent home-only on-line retailer.”

Adjusted EBITDA (non-GAAP) was $7 million, representing 1.6% of net revenue. Cash and cash equivalents totaled $371 million at the end of the quarter.

“2022 was a transformative year for Overstock,” said Johnson. “We completed the removal of all non-home merchandise from our site to better align our well-recognized brand name with home, and we increased our assortment of home-related products by over 50%. We now have over twice as many home-related products than we did when we began our non-home exit project two years ago.”

Overstock’s total net revenue was $1.9 billion, a year over year decrease of 30%, and gross profit was $443 million or 23% of total net revenue.

“We increased mobile app penetration as it has become our strongest customer engagement platform. We embarked on a refreshed branding campaign which we expect to accrue benefits for years to come. We proved our ability to drive sales during high consumer demand periods throughout the year, including the Cyber 5 sales period. And we made operational improvements in our Canada business.”

Operating income was $27 million, while net losses were $35 million, diluted net losses per share of $0.83. Adjusted diluted earnings per share (non-GAAP) were $0.52. Adjusted EBITDA (non-GAAP) was $63 million, representing 3.3% of net revenue.

“2023 will mark our first year as a 100% on-line home retailer, since going public over 20 years ago. We know we must focus our efforts on improving topline performance.”

“While the economic environment remains uncertain, our asset-light business model and strong balance sheet position us well for success – both in the short- and long-term,” concluded Johnson. “I look forward to providing a full update on our fourth quarter and full year 2022 performance during our earnings call.”

Fourth Quarter 2022 Operational Highlights*

- Active customers of 5.2 million, a decrease of 36% year over year

- Last Twelve Months (LTM) net revenue per active customer of $374, an increase of 9% year over year

- Orders delivered of 1.9 million, a decrease of 37% year over year

- Average order value of $215, an increase of 4% year over year

- Orders per active customer, measured as LTM orders divided by active customers, of 1.60, a decrease of 4% year over year

- Orders placed on a mobile device were 52% of gross merchandise sales

*Certain terms, such as active customers, LTM net revenue per active customer, orders delivered, average order value, and orders per active customer are defined under "Supplemental Operational Data" below.

A replay of the Feb. 22 conference call will be available at http://investors.overstock.com, starting two hours after the live call has ended.