Overstock Reveals Nearly 20% Revenue Loss In Q1 2019 As Sales Reduces Compared To 2018 Revenue
Overstock Suffers 17% Revenue Loss In Q1 2019 As Sales Reduces
While the cryptocurrency market is in a struggle to recover from the loss in 2018, Overstock, a major online retailer has reported significant revenue loss due to reduced sales. In the company’s quarterly report which was released today 9 May 2019, the company lost 17% of its revenue in Q1 of 2019 when compared to Q1 of 2018
The loss has been attributed to a retail strategy that caused the revenue growth in Q1 of 2018 being abandoned in August of 2018, according to the company’s CEO Patrick Byrne. That could have reduced sales significantly within the quarter, thus leading to reduced revenue from a gross profit of $93 million in 2018 to $73 million in Q1 of 2019.
Overstock’s token market tZero also recently failed to meet its $100 million investment target in April 2019. This led to an extension of the $100 million investment led by Makara Capital and GSR Capital would continue beyond the closing date. Overstock CEO in a letter to shareholders said:
“Makara’s due diligence has progressed, and in the course of its due diligence Makara has proven to be a professional and serious fund. Still, the parties will not have a definitive deal in place by the mid-April target. tZERO plans to continue facilitating Makara’s diligence, but is not under any exclusivity with Makara or GSR and has retained advisors to pursue parallel alternatives.”
Overstock is not the only company to have lost revenue, even the cryptocurrency industry isn’t left behind. In 2018, Coinbase reportedly fell short of its projected revenue by 60%, a significantly more severe loss than that of Overstock. This could have been due to the bear market but the company foresaw significant revenue in spite of it.
This must be a tough Q1 for Overstock as both its online store and token trading platform tZero seem to be losing it. Byrne, however, expresses confidence that the company’s retail contribution which grew 111% in Q1 2019 will most likely maintain the growth it recorded or grow further for another 6 months at the least.
Will there be a better Q2 coming for Overstock or is the revenue decline likely to continue? With the failure to meet the deadline for tZero’s investment, Overstock may be looking for new investors to meet its target and probably a new sales strategy to get back its revenue although