Overstock Drops Even After Earnings Exceed Estimates
Overstock (OSTK) - Get Report dropped on Wednesday even after the online surplus-goods retailer posted better-than-expected fourth-quarter results.
Shares of the Salt Lake City company at last check gave up 16% to $74.10.
Overstock earned 26 cents a share, swinging from a loss of 73 cents in the year-earlier quarter. Revenue rose 84% to $684 million from $370.8 million.
A survey of analysts by FactSet produced consensus estimates of GAAP earnings of 23 cents a share on revenue of $670 million.
"The operational improvements we began making at the end of 2019 enabled us to benefit from this unprecedented environment," Overstock Chief Executive Jonathan Johnson said in a statement.
"We doubled new customers, driving significant revenue growth. We improved margins and delivered profitability," he added.
E-commerce in general advanced strongly during the pandemic, which kept consumers at home and devastated the brick-and-mortar retailers.
Overstock's free cash flow, an adjusted number, was $177.3 million at the end of 2020.
"Our strong growth momentum persisted in the fourth quarter," said Johnson. "Net revenue grew by 84%, new customer growth nearly doubled, and repeat purchase behavior trended higher year over year."
"Our mantra in 2021 is sustainable, profitable, market share growth. I am confident we will achieve it," said Johnson.
Earlier this month, Overstock shares climbed after tZero, a subsidiary of the online retailer's Medici Ventures, signed a technology-integration agreement with Vertalo, a digital transfer agent. Following the integration, Vertalo’s technology will be interoperable with tZero’s technology stack.
And last month Overstock agreed to a partnership under which Pelion Venture Partners, the Salt Lake City early-stage venture-capital firm, would oversee Medici Ventures' blockchain assets.
