January 30, 2014, 10:58 AM

Home and garden products help Overstock.com boost revenue

The Top 500 e-retailer reports a 16% revenue increase for 2013. But legal and search marketing costs add to expenses.

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Overstock.com Inc. today reported a 16% year-over-year increase in revenue in the fourth quarter ended Dec. 31. For all of 2013, the mass-merchant web-only retailer, No. 31 in the Internet Retailer 2013 Top 500 Guide, posted a 19% year-over-year revenue gain.

Overstock credits an increase in average order values for most of that growth. In 2013, average order value stood at $158, up about 17.0% from $135 for the previous year. In Q4, average order value increased to $149, up 12.9% year over year from $132. Overstock’s costumers last year were especially keen on home and garden products, a shift that contributed to the growth in average order values, the e-retailer says.

For the fourth quarter, Overstock reported:          

  • Revenue of $397.6 million, an 16.3%  increase from $342.0 million in the same quarter a year ago;
  • Net income of approximately $73.6 million, up 736.4% from $8.8 million. Overstock said in its financial report today that tax considerations played a part in that increase.
  • Gross margin of 18.0%, versus 17.9% a year ago;
  • Sales and marketing expenses of $31.2 million, an increase of 51.4% from $20.6 million. The spending increase mainly came from the e-retailer devoting more money to search marketing.
  • Spending on technology of $18.4 million, down about 1% from $18.6 million.
  • General and administrative expenses of $20.5 million, an increase of 45.4% from $14.1 million. Those expenses include a roughly $6 million increase in legal costs and civil penalties, including for a ruling in California that the e-retailer systematically made false and misleading claims about the prices of its products. Overstock says it is appealing the ruling.

For 2013, Overstock reported:

  • Net revenue of $1.304 billion, an 18.7% increase from about $1.099 billion in the same period last year;
  • Net income of $88.5 million, up 502% from nearly $14.7 million;
  • Sales and marketing expenses of about $91.6 million, a 44.3% increase from $63.5 million;
  • Technology expenses of $71.8 million compared with $65.5 million, a 9.6% increase;
  • General and administrative expenses of $68.2 million, up 19% from $57.3 million.

 

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