What to expect when Overstock (OSTK) reports Q3 earnings?

Overstock.com Inc. (NASDAQ: OSTK) is scheduled to report third quarter 2019 earnings results on Tuesday, November 12, before the market opens. Analysts estimate the company will report a loss of $0.62 per share on revenue of $376.2 million. This compares to a loss of $1.58 per share on revenue of $440.5 million reported a year earlier.

This will be the first earnings report after Jonathan Johnson took over as CEO in September following the departure of Patrick Byrne in August. Any new plans or strategies will be worth noting.

Overstock remains confident in its retail strategy and the company anticipates achieving sustainable growth in its retail business aided by its supply chain initiatives as well as a rise in organic traffic. The company was considering the sale of its retail business but as the division gains strength, the online retailer is likely to hold on to it. It remains to be seen how the retail business performs during the upcoming holiday season.

Also read: Overstock Q2 2019 Earnings Call Transcript

The topline numbers are likely to be impacted by higher costs in the third quarter due to tariffs. The delay in the integration of a new freight carrier has led to higher freight costs as well. Last quarter, Overstock managed to reduce its marketing expenses significantly which benefited the bottom line numbers. The rise in costs could put pressure on earnings in the third quarter.

In the second quarter of 2019, Overstock missed revenue estimates but reported a narrower-than-expected loss. Revenue fell 23% to $373.7 million while net loss amounted to $0.69 per share.

Shares of Overstock have fallen 27% year-to-date and 12% over the past one month. The stock has an average 12-month price target of $44.00.

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