MIDVALE, Utah – Despite a 3% increase in net revenue and an 8% increase in gross profit, Overstock.com posted a loss attributable to stockholders that is 762% greater for the first quarter of 2018 than for the same period last year.
In the earnings call, Patrick Byrne, founder and CEO of Overstock.com, explicitly stated that his goal is to sell the retail business to a brick-and-mortar company and separate it from its blockchain subsidiaries.
Net revenue for this year’s first quarter totaled $445.3 million, compared with $432.4 million for last year’s first quarter. Gross profit rose to $93.9 million from $86.9 million year-over-year.
Net loss for the quarter totaled $54.5 million for first quarter 2018, compared with a loss of $6.3 million for the same period last year. The net income attributable to stockholders for the first quarter of 2018 was a loss of $50.9 million, or a loss of $1.74 per common share, compared with a loss of $5.9 million for the first quarter of last year.
The company also reported sales and marketing expenses for the quarter that were more than double what it reported for the first quarter of last year: $77.2 million, up from $37.6 million.
Overstock reported net cash in investing activities of negative $41.9 million for the quarter, compared with negative $12.4 million for the same period last year.
Net proceeds from the tZERO security token offering, held in the 2018 first quarter, totaled $62 million.
The earnings were reported a day after the company announced a shift in leadership: Patrick Byrne, founder and CEO of Overstock.com, will remain in those roles and return to the role of president of Overstock Retail. Hi position at blockchain subsidiary tZERO will change from CEO to executive chairman. Saum Nourasalehi, formerly president of Overstock.com, will become CEO of tZERO.
Byrne has made no secret that a change in Overstock.com ownership was imminent, and in this earnings call, he said the company was still meeting with “interested acquisition candidates.”
While previous possibilities mentioned by Byrne included keeping Overstock.com and its subsidiaries as a package, Byrne declared that the retail business would be separated from Medici Ventures and tZERO.
“I was open to the idea that these businesses belong together, the blockchain and the retail,” Byrne said during the earnings call. “I do not see any reason these businesses would stay together at this point.”
The ideal fate of the retail business, in Byrne’s mind, is to be bought by a brick-and-mortar company.
“I’m committed to the point of view that the only logical place for the retail business is part of a brick-and-mortar. It should be hybridized with brick-and-mortar. And that means we either go buy brick-and-mortar or brick-and-mortar is going to buy us,” Byrne said.
“I have no interest in buying brick-and-mortar, none whatsoever, so I can promise you that’s not going to happen.”