By Sabrina Escobar
Beyond, formerly Overstock.com, missed earnings expectations, sending the stock lower in after-hour trading Monday.
The online furniture retailer reported a first-quarter adjusted loss of $1.22 cents a share, wider than analyst estimates for a loss of 87 cents a share. Revenue inched up 0.3% year-over-year to $382 million, slightly below expectations for $389 million.
Active customers jumped 26% to six million, in line with forecasts.
Beyond stock fell 8.9% to $19.96 in late trading. Shares are down 21% this year as of Monday's close.
The company is in the midst of a multiyear plan to pivot away from its reputation as solely a furniture liquidator and instead establish itself as a leading player in the online furniture marketplace. The shift began last summer, when the company purchased the Bed Bath & Beyond brand out of bankruptcy and adopted the brand's name.
Since then, the company has also acquired mom-focused online retailer Zulily, and relaunched the original Overstock.com website in addition to the Bed Bath & Beyond website.
"We believe each of them has the potential to become a billion-dollar-plus revenue brand in its own right," said Marcus Lemonis, Beyond's executive chairman.
All these changes, however, have come at the cost of the company's financial performance. This is the second consecutive quarter in which Beyond posted a wider loss than expected.
Granted, the furniture industry has been in a slump for the better part of the last two years, as inflation and higher interest rates have weighed on big-ticket purchases. Plus, many consumers bought new furniture during the pandemic that they haven't needed to replace just yet.
But competitor Wayfair's better-than-expected earnings report, released last week, suggest that it is still possible to grow and gain market share even within a tough market for furniture sales. Wayfair stock has gained 9.3% this year, closing 6% higher Monday.
Following the acquisition, then-CEO Jonathan Johnson, who has since left the company, predicted Beyond would have to spend heavily on marketing and other customer acquisition initiatives to lure shoppers back to the Bed Bath & Beyond brand -- expenses that he predicted would weigh on the bottom line.
But going forward, Beyond is planning on cutting back on spending. In the previous quarter, the company said it was aiming to reduce yearly expenses by $45 million.
"We're pleased with the growth in active customers and transactions during the quarter," said Adrianne Lee, chief financial and administrative officer. "However, in analyzing the profitability of that growth, we are making the strategic decision to focus on investments to launch these brands and acquire customers with a higher probability of repeat behavior."
Write to Sabrina Escobar at sabrina.escobar@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
May 06, 2024 18:07 ET (22:07 GMT)
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