Overstock plans a 'dramatic' increase in its product assortment
February 1, 2017 03:33 PM
Overstock.com Inc.’s fourth quarter and full-year sales growth was limited to under 10%, and the online-only retailer says it plans to boost the number of products available on its website this year in an attempt to spur faster growth.
Overstock, No. 29 in the Internet Retailer 2016 Top 500 Guide, reported net revenue of $526.2 million in the fourth quarter ended Dec. 31, up 9.6% from $480.3 million during the same period in 2015.
The online retailer’s 2016 sales inched closer to the $2 billion mark, with Overstock reporting total sales of $1.80 billion, up 8.6% from $1.66 billion in 2015. Despite its relatively modest sales growth for an e-commerce company, Overstock reported a better than five-fold increase in profits to $12.5 million in 2016 from $2.4 million the year before.
Overstock founder and CEO Patrick Byrne told analysts on the retailer’s Q4 2016 earnings call that shoppers can expect to see more products for sale on its website in 2017.
“You will see radical expansion of our assortment,” he told analysts on the call, according to a transcript from Seeking Alpha. “For years we were focusing on [having] a curated assortment, and we were up against people with who were also trying to own curated assortment. We are radically expanding our SKU count. We are also approaching I think, 5 million, 6 million [SKUs] over the next (year) and that’s up about five times from a year ago.”
For the fourth quarter ended Dec. 31, Overstock reported:
- Direct revenue, which Overstock defines as orders fulfilled from its own warehouses, of $25.7 million, down 23.5% from $33.6 million last year. Overstock could not be reached immediately for comment on this change.
- Partner revenue, which Overstock defines as orders fulfilled by other retailers that sell through its website, of $500.5 million, up 12.0% from $446.7 million.
- Average order size of $181, up 11.7% from $162.
- Orders shipped directly from Overstock.com accounted for 4.9% of revenue, compared with 7.0%.
- Net income of $3.1 million compared with $110,000.
For 2016, Overstock reported:
- Direct revenue of $101.6 million, down 26.3% from $137.8 million last year.
- Partner revenue of $1.698 billion, up 11.7% from $1.520 billion.
- Orders shipped directly from Overstock.com accounted for 5.6% of revenue, compared with 8.3%.
- Net income of $12.5 million compared with $2.4 million.