Online retail giant and major crypto industry disruptor Overstock.com has seen a 17% decrease in revenue in Q1 2019 from Q1 2018, the firm’s CEO Patrick Byrne revealed in the latest quarterly report released on May 9.
Overstock’s total net revenue reportedly decreased from $445 million in Q1 2018 to $367 million in Q1 2019, as the company saw a sufficient decline in sales and marketing expenses as part of their effort to bring back retail profitability.
Following a major shift in retail strategy with a large increase in sales in January 2018, Overstock reportedly stopped this strategy in August 2018 and has now come back to a “disciplined approach to marketing,” as Byrne noted.
With that, Overstock has also seen a 22% decline in gross profit in Q1 2019, down from $93 million in Q1 2018 to $73 million. As the report reads, the decrease in gross margin took place mainly due to increased freight costs. Still, Byrne also stated that the company’s retail contribution, which stands for gross profit minus sales and marketing expenses, grew 111% in Q1 2019, and is expected to hold or increase for at least two more quarters.
Apart from the financial results, Byrne also revealed some key plans and perspectives for Overstock in 2019. As such, the CEO stated that the firm’s token capital market will be ready for public use by May 2019. In a few weeks, the company is expected to roll out their full kit of technology and applications for security token trading, as Byrne wrote.
Recently, Overstock’s blockchain subsidiary tZero missed its mid-April goal for a $100 million fund raise from Chinese investment firm GSR Capital and Singaporean private equity firm Makara Capital.
According to today’s release, tZero recorded a $15.4 million pre-tax loss in Q1 2019. The report also notes that Overstock’s Q1 2018’s crypto losses were related to a decline in the value of cryptocurrencies that they received during the tZero security token offering.
Earlier in April, major crypto exchange and wallet service Coinbase was reported to generate 60% less in revenue in 2018 than it actually planned.