Overstock revenue increases nearly 17% in Q1

April 27, 2015 04:01 PM Inc., the web-only mass merchant that is No. 31 in the Internet Retailer 2015 Top Guide, Monday reported that its first-quarter revenue increased nearly 17% year over year.

Overstock credited much of the revenue gain to a 5.5% increase in average order size, to $174 from $165 in the first quarter of 2014, along with a 12% year-over-year increase in the number of orders. “Although our average order size has increased in recent years, we expect the rate of increase to lessen as our sales mix shift into home and garden products tapers,” the e-retailer says.

The company also gave an update on its mobile traffic. "We are over I believe 50% of our traffic [from] mobile," said CEO Patrick Byrne in a conference call today with investors, according to a Seeking Alpha transcript.

Still, another executive added, there are limits to what some Overstock shoppers will do with mobile. "Tt’s a hard place to make a transaction on your little phone if you’re buying a big couch," said company president Stormy Simon. "So the traffic goes there and they tend to buy on the big screen, because they want to make a more educated decision. Our search on mobile is where we get a lot of the traffic, because we are very relevant there and I would say we are prepared as any home retailer can be, but we will be increasing our content in engagement there this quarter heavily."

For the quarter ended March 31, Overstock reports:

  • $398.3 million in total revenue during the quarter, a 16.7% increase from $341.2 million in the same quarter of 2014. Of that Q1 revenue, approximately $36.1 million, or 9.1%, came from direct sales that it ships itself (versus about 9.5% in Q4 2014 and 11.2% in Q1 2014). The remaining 90.9% of sales are shipped by suppliers (versus 90.5% in Q4 2014 and 88.8% in Q3 2013), Overstock says. (Overstock fulfills direct sales from its own warehouses; the balance of sales are drop-shipped by suppliers.)
  • $2.7 million in net income during the quarter, a 32.5% decrease from $4.0 million in the same quarter last year.
  • $28.0 million in sales and marketing expenses, a 19.7% increase from $23.4 million in the year-ago quarter.
  • $43.6 million in general, administrative and technology expenses, up 24.9% from $34.9 million last year. The increase includes a $1.9 million bump in staff and travel-related costs, a $1.5 million increase in legal costs and a $1.3 million increase in management consulting services. 

During the conference call today company executives also addressed the shift to dimensional weight fees by UPS and FedEx, which is raising the cost of many e-retail ground shipments, leading merchants to look for alternatives. "Who wins that game is a function, who has the most granular data about their expense down to the SKU level, because then you can price in where you have more expenses," Byrne said. "If you just peanut butter spread your shipping expenses across a bunch of items, then you can’t price them correctly."




Top Solution Providers