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

Jonathan Johnson : Steven, it’s hard to give exact numbers. I’ll tell you the group I expect to grow the most, and that’s the legacy Bed Bath & Beyond customer, because during that first two months of the launch, we were still warming up that massive email file that we purchased. And when I say warming up, it’s really keeping them at all of our other customers out of spam filters, by doing this in a very measured, and programmatic way. That’s now – those files are warmed up. That’s a group we can talk to in the total. So that’s should, that should be the group that’s percentage increases the most. Dave?

Dave Nielsen: I think, that’s right, Jonathan. And the second group would be that TAM New group. And what’s encouraging about that, I just – I have to go back to this. Again, I mentioned it in the remarks. This group had the highest average order size and they have found us in the initial stages of the brand launch. They found this through searching on Google. We have not had the brand campaign. The national brand campaigns that are going to be launching here in the coming days. So that group is very encouraging to us because as they grow, that will grow that legacy Overstock business as well. They were very high in furniture ranking. And you’ll see that on the on the schedules that we’ve provided after the call. We’ve laid that out. So you can see the top product categories and performance based on each of those segments, I talked about.

Jonathan Johnson : Steven. Thanks for those questions.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Jonathan Matuszewski from Jefferies.

Jonathan Matuszewski: Hey, good morning and thanks for taking my question. My first one is a follow-up on the financial recipe after this initial period of ad spend and discounting. I think the last plan you communicated was returning to kind of that pre-deal financial recipe or something close to it by the end of 2024. It looks like the Streets modeling, gross margins shy of that 22% range and negative margins versus positive. A lot changed obviously over the last couple of months in terms of rates in housing. So just curious is that plan still intact? And if so, what’s the biggest disconnect you see with the Street’s number in terms of the second half of next year? Thanks.

Jonathan Johnson : Adrianne, do you want to answer to Jonathan’s question, please?

Adrianne Lee: Sure. Happy to. I do think, Jonathan, I know that probably expectations are a bit across the board and right now we really haven’t given any 2024 guidance or thoughts. I think our general goal is we think our business can operate within the parameters of the recipe card. And that’s kind of our north star by which we will run the business and perform post these acquisition activities. But we haven’t given the timeline. In fact, today, I think is the first time we talked about this 12 to 15 months investment period of about $175 million.

Jonathan Johnson : Yeah. Jonathan, I’ll just noted in our prepared remarks, we talked about the importance of growing the active customer file. We’re seeing great success on that. We talked about our goals of growing AOV. I think fourth quarter AOV tends to always be a little lower because of giftables. But with our marketing campaign and then moving into 2024, we think we can take a aspirationally looking to take AOV back to where it’s been in the past. And then the other thing I mentioned is, we have a goal of increasing that average orders per customer which, runs kind of the one, five area – 1.5 area. The goal is to get that to two overtime and we are laser focused on working that. I don’t think that happens in 2024. But over time those are the three metrics that we’re working on as we think those will drive top-line and bottom-line.