Overstock.com reported financial results last week for the fourth quarter of 2008. The auction platform saw more trading in the fourth quarter compared to a year ago, but auction trading for the full year was down in 2008 compared to 2007.
Auction gross merchandise volume was $4,435,000 for the quarter compared to $3,183,000 in the fourth quarter of 2007. However, auction gross merchandise volume for the full year 2008 was $11,540,000 compared to $14,259,000 in 2007.
Revenue for the fourth quarter 2008 was $255.9M compared to. $294.5M in 2007 (a 13% decrease), and net income was $1 million compared to a loss of $6.5 million in the same quarter, 2007.
Revenue for the full year 2008 was $834.4 million compared to $765.9 million in 2007 (a 9% increase), and the company had a net loss of $12.7 million compared to a loss of $48 million in 2007 (a 74% decrease).
In a press release, Patrick Byrne said, "The fallout from the 2008 holiday season will be severe for the general retail industry. We were impacted like every other retailer in the country, and experienced a decline in sales. Traffic to our site during November and December was comparable to last year, but consumers purchased less frequently. As a result, revenues declined 13% in the fourth quarter, but were up 9% for the year."
He said that while early on in the year, Overstock.com had received a flood of interest from manufacturers and others looking to Overstock to liquidate merchandise, mainstream retailers began liquidating on their own through massive promotions and discounting as the season progressed.
He also announced the company was entering the consignment business. "We are preparing for a glut of supply as companies and stores around the country go out of business or close over the near term. We recently leased a large warehouse in Salt Lake City. We are developing a consignment model, where manufacturers and distributors desirous of reducing costs will be able to consign their slow-moving inventory to us, and we will provide handling, storage, sales and fulfillment for these companies. We have the capacity and the expertise to make this work, and the timing is perfect."
In a conference call with investors, Overstock.com Senior Vice President of Finance Steve Chesnut said the company incurred a one-time benefit of $3.7 million when it decided not to make a profit-sharing contribution and the senior executive team requested not to receive a bonus. (Transcript available on SeekingAlpha.com).
