Dec 27, 2005 (10:12 AM EST)
Overstock.com Lowers Forecasts
Read the Original Article at InformationWeek
Online closeout retailer Overstock.com Inc. on Tuesday warned that fourth quarter earnings and revenues would be less than expected.
The Salt Lake City company said net income would be a "percentage or two" less than its target of breakeven. In addition, revenue growth would fall within the range of 60 percent to 100 percent, or about two times the industry average, versus the three to four times that the company had posted in the past.
Overstock.com expected to be breakeven to positive for the quarter on earnings before interest, taxes, depreciation and amortization (EBITDA). The company, however, expected to have negative operating cash flows for 2005, due to a build up in inventory balances.
"We've had a nice holiday season, just not as nice a season as we've had in the past or as I'd hoped for," Patrick Byrne, president of Overstock.com, said in a statement.
Byrne said he had determined that this holiday season would be "critical for solidifying our brand in our customers' eyes."
"To get above the noise, we spent a few dollars more than we had hoped, but in my experience, over time, those dollars will pay large dividends," Byrne said.
Byrne's statement followed a Dec. 23 appearance on Bloomberg Television, in which he discussed how fourth quarter growth had slowed from its previous levels.
In late afternoon trading on Tuesday, Overstock.com stock was down $2.59, or 7.7 percent, on the NASDAQ to $31.05.
Overstock.com is scheduled to announce its fourth quarter results in late January or early February.
Bryne took some heat earlier this year after he blammed IT projects for a multimillion operating loss in the third quarter.