News’s sales grow 2.1% in Q4, 10.7% for the year

February 10, 2016 01:53 PM

The increasing popularity of its multi-tiered Club O loyalty program may have hindered Inc.’s growth in 2015.

Overstock, No. 31 in the Internet Retailer 2015 Top 500 Guide, reported net revenue for 2015 of $1.66 billion, up 10.7% from $1.50 billion last year. Sales growth was slower during the fourth quarter, with the online retailer reporting net revenue of $480.3 million, up 2.1% from $470.4 million last year.

The online-only retailer, in a filing with the U.S. Securities and Exchange Commission, says changing Club O into a two-tiered system, silver and gold, that lets shoppers earn rewards instead of coupons may have hurt the company in the short term.

“We believe that the shift from coupons to rewards will benefit us in the long term, but we have experienced some difficulties with the transition, and in the short term we believe it slowed our revenue growth as customers take time to become accustomed to this change,” Overstock writes. “We are continuing to test and refine our approach in this transition.” Overstock did not disclose in its SEC filing or during its Q4 2015 earnings call the number of Club O members. As of Q3 2015, Overstock said its Club O Silver program had 19 million members.

For the fourth quarter ended Dec. 31, Overstock reported:

  • Direct revenue, which Overstock defines as orders fulfilled from its own warehouses, of $33.6 million, down 21.1% from $42.6 million in Q4 2014.
  • Partner revenue, which Overstock defines as being orders fulfilled by other retailers that sell through its website, of $446.7 million, up 4.4% from $427.8 million.
  • Average order size of $162, up 1.9% from $159.
  • Orders shipped directly from accounted for 7.0% of overall revenue, compared to 9.1%.
  • Gross profit of $83.1 million, down 2.7% from $85.4 million last year.

For 2015, Overstock reported:

  • Direct revenue of $137.8 million, down 6.6% from $147.5 million.
  • Partner revenue of $1.52 billion, up 12.6% from $1.35 billion.
  • Average order size of $175, up 3.6% from $169.
  • Orders shipped directly from Overstock accounted for 8.3% of overall revenues, compared to 9.8%.
  • Gross profit of $304.7 million, up 9.2% from $279.1 million last year.



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