Overstock.com Inc. has reported its first quarterly revenue decrease in the third quarter. The online merchandise liquidation firm added that its early fourth quarter revenues are lagging behind the fourth quarter of 2005.
The firm reported $158.7 million in revenues for the third quarter, representing a 6% decline compared to the third quarter of 2005. It reported gross profits of $22.9 million for the third quarter, a 14% decline compared to same period last year.
“The conversion — the percentage of (Web site) visitors who became buyers was weak — too weak, in fact to overcome with marketing,” reported Overstock.com.
For the first nine months of the year total revenue increased 3% to $498.9 million, up from $485.8 million for the first nine months of 2005. However, gross profits for the first nine months of 2006 totaled $71.1 million, compared to $74 million in 2005, reflecting a 4% decrease.
Overstock.com attributed some of the decline to increases in pay-per-click costs and rising Web portal costs. To turnaround its finances Overstock.com said it plans to improve its keyword media purchases and increase its offline marketing efforts in direct response radio, in addition to restructuring internal functions, among other things.
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