Overstock.com doubles its Q2 sales over a year ago
Second quarter revenue at discount and closeout retailer Overstock.com Inc. reached $28.8 million, up 101% over the $14.4 million recorded in the same period a year ago, the company reported today. Net loss for the second quarter was $1.1 million compared to $2.4 million a year earlier. Gross merchandise sales--sales price of all sales transactions, including those for which the company only records a commission--were $51.3 million, up 94% from $26.5 million a year ago.
"Several factors contributed to our improved bottom line: In April we reduced our corporate payroll by 15% to better align expenses with revenues; we restructured or eliminated underperforming marketing programs, which has helped lower our marketing spend; and we improved our gross margins,” said CEO Patrick Byrne. “In short, if this was a four round fight I`d say we were unexpectedly dropped to the canvas at the end of the first round, but we got our knees back under us in the second, and we are getting up on our toes again now."
Overstock.com also has changed its customer service and return policies and procedures. As of July 1, the majority of customer returns will be handled through the company`s Salt Lake City warehouse, regardless of whether they were originally shipped by Overstock.com or shipped by a fulfillment partner. In addition, returned products that Overstock.com resells will be shipped to customers from the company`s warehouse in Utah. "This enables us to exercise comprehensive oversight of the entire consumer experience," said Byrne.
As a result of this change, Overstock.com will record revenues generated from the company`s fulfillment partners on a gross basis instead of on a net basis as was previously the case. Before the return policies change, Overstock.com’s GAAP gross sales included only the commission portion earned on products shipped by fulfillment partners. The company warned that the change increase third quarter revenue “dramatically,” but Byrne added: “This does not change the underlying economics of our business one iota, though it may help investors better understand those economics."
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