Overstock.com, Inc. (NASDAQ:OSTK) Q3 2023 Earnings Call Transcript

Jonathan Johnson : Thanks, Adrianne. We are excited about taking Overstock back to its roots, being a clearance liquidation site. And anyone who’s been in the clearance and liquidation business like a long time visit Overstock like me have been know that retailers are always trying to avoid channel pollution. They don’t want their clearance product next to their current product. That’s why we couldn’t be a general retailer and a liquidator at the same time. No one can be. When we stand up, restand up the Overstock site as a clearance site, it will be very different. There will be no similar products. That’s how you avoid channel pollution. The pricing will be true clearance liquidation pricing. There will be some, some hurdles to get over there, but by having none of the similar product on site, we think we can avoid the cannibalization that your question was concerned with. Hope that addresses the questions Anna.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Seth Sigmund from Barclays.

Seth Sigmund: Hey, good morning, everyone. I wanted to talk about the $175 million of investments. Can you frame for us how much has been spent to-date? And then, where do you plan to deploy that? Is that pricing? Is that marketing? Do you need to do more hiring? So I guess that’s the first part. And then, you did say that would occur over the next 15 months. Is there a cadence to think about just so that we can appropriately manage expectations? Thank you.

Jonathan Johnson : Yes, that’s a great question. And, it’s part of the more color that we want to provide. I’ll turn to Adrianne to address it and look to Dave to maybe add some color. But, as I noted, we spent about $25 million on the deal between buying it and acquisition-related. We spent some this quarter. You can see that in our results. Adrianne, do you want to talk about kind of the cadence of what’s the remainder?

Adrianne Lee: Happy to. Yes, I think that’s kind of in total as Jonathan outlined those buckets, let’s just say we’ve spent around $50 million thus far with third quarter and kind of the acquisition activities. I talked about in my prepared remarks that we expect to see this over the next 12 months or so, likely more heavily weighted in the next three quarters. That’s starting with fourth quarter so fourth, first and second. And I would say we’re going to deploy kind of those investments opportunistically. Some of them may hit gross margin for discounting and promotional activity. Some will hit sales and marketing as we launch our branding campaign and various other items. And certainly we will continue to be really sharp on our pricing as I said in my remarks as well offering our customers, the best value.

Jonathan Johnson : Dave, you what do you add?

Dave Nielsen: So, on the marketing front, we’ve got a really exciting brand campaign that’s launching here at the 1st of November, that we’re really excited about. That triggers a couple of thoughts. It’s about a bigger, better Beyond, which pushes our legacy Overstock product, and our Bed Bath & Beyond product. So, customer understands the wide, the broad, the bigger older assortment that we have. Second, it features a coupon and I will tell you this single item 20% off coupon, it is money. It is money to this customer. It is a trigger for them. And we are using that to reactivate those customers. And we’re really encouraged by what that will do for us. We’re also standing up. Jonathan, mentioned this our wedding registry, our emerging trade business. These are areas with this brand. We have real permissions to go grab market share. And so we’re spending some money in those areas as well.