Overstock.com posts revenue hike

Overstock.com, the Salt Lake-based online discount retailer, reported revenue of $87.8 million during the second quarter, a 204 percent increase compared to $28.8 million in 2003.

But the company's net loss for the quarter also increased when compared to 2003.

For the six months ended June 30, Overstock reported its total revenue was $169.9 million, up 193 percent from $58 million in 2003.

The company qualified its quarterly report by stating that a change in its customer return policies implemented at the beginning of the third quarter of 2003 meant that its revenue increased significantly and gross margins decreased significantly compared to previous reporting periods.

Overstock's second quarter gross profit was $9.9 million, a 106 percent increase over the $4.8 million recorded for the same period a year ago. For the six months ended June 30, gross profits totaled $18.4 million, up 95 percent from the $9.4 million recorded in 2003.

However, the company reported a net loss for the second quarter of $2.3 million, or 13 cents per share, compared to a net loss of $1.1 million, or 7 cents per share, one year ago. For the six months ended June 30, the net loss totaled $4.5 million, or 27 cents per share, compared to a net loss of $5.1 million, or 33 cents per share, in 2003.

In a letter to shareholders, Overstock chief executive Patrick Byrne said he was optimistic about the coming quarter.

"In past Novembers we finished the ark by wading in waist-deep water pounding nails in the rain," he wrote. "This year our ark will be complete before the first raindrop falls."

This year, Byrne said, the company focused on expanding capacity, largely through greater efficiency and organization.

"These changes will allow us to get through a $250 million revenue quarter," he said. "There is some inexpensive (a few hundred thousand dollars) equipment that can take us to a capacity of $400 million revenue quarter. In fact, if one looks into the future, there are multimillion-dollar tilt-tray sorters and warehouse redesigns (narrow aisles, cherry pickers, off-site bulk storage with nightly wave replenishment) that could take us to about $1 billion/quarter capacity."

To accommodate its projected growth, Byrne said the company has decided to open a new warehouse, the details of which will be announce next month.

---

E-mail: jnii@desnews.com