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Overstock.com's (OSTK) Q4 Earnings and Revenues Miss Estimates

Overstock.com OSTK reported a fourth-quarter 2022 loss of 4 cents per share, which missed the Zacks Consensus Estimate profit of 3 cents per share and declined 111.1% year over year.

Revenues of $404.9 million decreased 33.9% year over year. The top line lagged the consensus mark by 13.2%.

The revenues were hit due to discounting activities by old and new competitors, the management’s strategic decision to remove non-home products from their site and the contraction in demand in the real estate sector.

Active customers reached 5.162 million at the end of the fourth quarter of 2022, down 36.1% year over year.

The number of active customers declined due to decrease in home related spending, change in spending preference and company’s transition to 100% online home retailer.

The average order value was $215 in the reported quarter, increasing 4.4% year over year. However, orders delivered were 1.882 million, down 36.7% year over year.

Overstock.com, Inc. Price, Consensus and EPS Surprise

Overstock.com, Inc. Price, Consensus and EPS Surprise
Overstock.com, Inc. Price, Consensus and EPS Surprise

Overstock.com, Inc. price-consensus-eps-surprise-chart | Overstock.com, Inc. Quote

Operating Details

Gross margin contracted 60 basis points (bps) to 22.1% in the reported quarter.

Sales & marketing (S&M) expenses decreased 33% year over year to $45.5 million. As a percentage of revenues, S&M expenses increased 20 bps to 11.2%.

Technology expenses were $27.9 million, down 9.7% year over year. As a percentage of revenues, technology expenses jumped 180 bps on a year-over-year basis to 6.9%.

General & administrative (G&A) expenses decreased 10.3% year over year to $18.7 million. As a percentage of revenues, G&A increased 120 bps to 4.6%.

Adjusted EBITDA was $6.5 million, which declined 76.2% from the year-ago quarter.

Operating loss was $15.5 million compared with $32.9 million profit reported in the year-ago quarter.

Balance Sheet

As of Dec 31, 2022, Overstock had cash and cash equivalents worth $371.263 million compared with $427.530 million as of Sep 30, 2022.

Long-term debt, as of Dec 31, 2022, was $34.476 million compared with $35.369 million as of Sep 30, 2022.

During the three months that ended Dec 31, 2022, Overstock repurchased $20 million of its common stock.

As of Dec 31, 2022, Overstock had approximately $19.9 million remaining under the current repurchase authorization.

Zacks Rank & Stocks to Consider

Overstock.com currently carries a Zacks Rank #3 (Hold).

Investors interested in the broader Zacks Retail-wholesale sector can also consider some  top-ranked stocks like American Eagle Outfitters AEO, Carrols Restaurant Group TAST carrying a Zacks Rank #2 (Buy) and Abercrombie & Fitch ANF sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

American Eagle Outfitters, Carrols Restaurant Group and Abercrombie & Fitch are scheduled to report their quarterly results on Mar 1, Feb 28 and Mar 1, respectively.

The Zacks Consensus Estimate for AEO’s fourth-quarter 2022 earnings is pegged at 30 cents per share, up by 2 cents over the past 30 days.

The Zacks Consensus Estimate for TAST’s fourth-quarter 2022 loss is pegged at 22 cents per share, unchanged over the past 30 days.

The Zacks Consensus Estimate for ANF’s fourth-quarter 2022 earnings is pegged at 85 cents per share, up 6 cents over the past 30 days.

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