Dive Brief:
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Overstock.com Inc.’s revenue declined 30% in 2022, driven in part by a weak macroeconomic backdrop that impacted consumer sentiment, the online retailer said Wednesday.
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The Salt Lake City, Utah-based home furnishings seller generated net revenues of $1.9 billion last year, compared with about $2.7 billion in 2021, according to results announced in a press release and earnings call on Wednesday. Total net revenue for the fourth quarter fell 34% to $405 million from the year-earlier period.
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“Weak consumer sentiment and a pressured housing backdrop continued to impact our top line performance, while we also face competitive pressure, mainly from increased and earlier discounting activity during the quarter,” Overstock.com CFO Adrianne Lee said during the earnings call.
Dive Insight:
Overstock.com is among a number of U.S. companies that are bracing for a tough road ahead amid ongoing macroeconomic pressures.
“From a broader industry perspective, we expect [that] the macro drivers of inflation, rising interest rates, and the weak housing market will influence performance through the year,” Overstock CEO Jonathan Johnson said during the Wednesday call.
Other companies anticipating future economic turbulence include home improvement company Home Depot Inc. and retail giant Walmart Inc., as previously reported by CFO Dive.
Consumer prices rose 0.5% in January in the biggest gain in three months, with Federal Reserve officials signaling the need for increased interest rates in the future if inflation refuses to ease up.
Besides economic challenges, Lee attributed Overstock.com’s fourth-quarter financial loss to pressure from an “intensely competitive landscape and our strategic decision to remove non-home products from our site.”
The online retailer began removing non-home products from its website in January 2021 and has more than doubled its home-only assortment through the end of 2022, according to Johnson.
The CEO said the company’s financial performance could improve by the second half of the year as it gets beyond the temporary headwinds created by the shift away from non-home products and begins to enjoy the “benefit from newness in [home-only] product assortment.”
