Overstock.com falls on Q4 margin warning
Overstock.com, Inc. (Nasdaq: OSTK) shares are falling after the online retailer said its fourth-quarter gross margins are likely to be lower because of aggressive price discounting. During a Friday interview after the closing, CEO Patrick Byrne said the company is having a “pretty nice” Christmas selling season.
Byrne said the company’s bookings have increased compared to fourth-quarter 2006 by about 10%. However, he warned that the firm’s gross margins will be lower and said he expects fourth-quarter net income in the range of -1% to 1% of revenue. The company expects to make between $50 million and $60 million in operating cash flows during the fourth quarter, he said.
"Next year we have an initiative to open up Canada and a couple countries in Europe,” Byrne said.
In response to Byrne’s interview, which took place on CNBC, CIBC World Markets cut its fourth-quarter earnings estimate for Overstock.com to a loss of $0.08 per share, from a prior estimate of a profit of $0.15 a share.
In afternoon trading, OSTK shares are down 20.85%, or $4.97, at $18.87. Over the last 52 weeks, shares have ranged from $14.05 to $39.39.
