Blaming conversion rates not equal to the rising cost of pay-per-click advertising, the expiration of portal deals and other marketing challenges, Overstock.com CEO Patrick Byrne announced Q3 financial results including revenue that for the first time in the company’s history decreased from a year earlier. In addition, early Q4 revenue is lagging behind last year’s Q4 to date, according to Byrne.
Sales at Overstock dropped 6% for the third quarter ended Sept. 30. The pure-play brought in $158.7 million compared with $169.3 million during the same period last year. For the nine months ended Sept. 30, sales were up 3% to $498.9 million from $485.8 in the same period in 2005.
Net loss for Overstock, No. 18 in the Internet Retailer Top 500 Guide to Retail Web Sites, in Q3 2006 was $24.5 million compared with $12.4 million in Q3 2005. For the nine months ended September 30, net loss totaled $56.2 million compared with $18.6 million in 2005.
Gross profit for Q3 2006 dropped 14% to $22.9 million from $26.6 million in Q3 2005. For the first nine months of this year gross profits registered $71.1 million, a 4% decrease from $74 million during the same period in 2005.
In a letter to shareholders, Byrne said customer satisfaction levels were up and that earlier IT issues have been resolved. “I believe we have never been better prepared for the holidays,” he said. Byrne added that Overstock is increasing offline advertising, mostly on radio; has outsourced some internal marketing functions and is pursuing tighter management of keyword buys.
Overstock.com is an online closeout e-retailer that offers discount, brand name merchandise.
Back...
