Overstock CEO: Holiday season will be ‘very promotional’

Online retailer Overstock.com (OSTK) missed on top and bottom line estimates in the third quarter. Overstock has also acquired the trademarks and digital assets of shuttered big-box retailer Bed Bath & Beyond and intends to rebrand itself as Beyond, Inc.

Beyond Inc. CEO Jonathan Johnson joins Yahoo Finance Live to discuss the website's rebranding campaign and what the company expects for the holiday shopping season.

"We're very confident that with this rebrand the holidays will be better to us than they've been in the past," Johnson says, later commenting on its inventory categories amid holdups in the U.S. housing market.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

JULIE HYMAN: Overstock reporting mixed third quarter results today, following the purchase of parts of Bed Bath & Beyond earlier in the year. The company, by the way, announcing this week it will rebrand. It will become Beyond Inc.. Revenue, by the way, did not meet the Street's predictions. But the losses did come in smaller than expected.

Joining us now, Overstock CEO Jonathan Johnson. Great to see you, Jonathan, as always, to talk about the quarter and the integration here. I want to start with, if you could, a bit of an explainer. Because you all reported that revenue fell 19% year over year.

The acquisition of the Bed Bath & Beyond assets and, more importantly, the rollout of the brand in the US as part of Overstock, happened later in the quarter. So talk to us about the cadence, then, and how that decline factored in as the quarter went on.

JONATHAN JOHNSON: Well, we did miss the top line, but there were a lot of things that we really liked about the launch. One, it happened quickly, within 33 days after the acquisition, and two, that we saw an increase in active customers of nearly 300,000. These are people that hadn't shopped with us in over 12 months or had never shopped with us that came to-- came to shop.

August was great. The launch was really strong, followed by September's Labor Day, which was strong. Historically, the end of September is usually a little slower, and we saw that, too.

We do think we're in a good position to capitalize on the upcoming holidays. We have an exciting new national branding campaign that we'll be launching next week. So we're very confident that, with this rebrand, the holidays will be better to us than they've been in the past.

JOSH LIPTON: Yeah, I'm interested, Jonathan, just to dig into more of your outlook for the holidays that you mentioned there. Because as we all know, consumers are facing some challenges here-- rising energy prices, higher borrowing costs. What do you see coming up here in the holiday season?

JONATHAN JOHNSON: Well, I think the holidays are going to be highly promotional. I think they'll be challenging. As we've added nearly-- we've added over 2 million product SKUs to the site since the announce of this deal. Those are really across good, better, and best product categories. We do see people trading down some, and we have the product to give them.

We're going to be bringing back the 20% off coupon as part of our national branding campaign. We know that as people spend at the holidays, they'll be trying to stretch their dollar this year a little bit more than they have in the past. And we think we're good at that. And we think Bed Bath & Beyond is a brand that they're used to coming and purchasing gifts. And they're used to coming to purchase tabletop and other decor that they use when they host for the holidays.

JULIE HYMAN: So Jonathan, we've talked about this a little bit in the past, what buying these assets have done for you guys. Does it also diversify you away from being overly reliant on home, right, if you're going to lean into the gift-giving aspect for the holidays? We've been talking, almost on a daily basis, about the sort of freeze in the housing market. How are you viewing that market right now?

JONATHAN JOHNSON: Yeah, I think for the fourth quarter, we'll be better than we have in the past because of the gift giving. Home is not particularly a strong fourth-quarter category, historically. But with more giftables, we think it will be stronger for us.

Another thing we talked about on our earnings call today, and it's part of our renaming the corporation Beyond, is that we can go beyond being just a single-site retailer. We plan to, in the next 12 to 15 months, reimagine the Overstock site, stand it up not as a competitor to Bed Bath & Beyond, but as a cross-category, Overstock-branded clearance and liquidation site, going back to our roots of almost 25 years ago.

So we are looking at ways to become less affected by swings in portions of the economy. And high interest rates, low housing sales-- they certainly have made it tougher, from a macro perspective, for our industry.

JULIE HYMAN: And does that return to your roots, if you will, with a reimagined overstock.com-- does that also lean into maybe some anticipated economic weakness as well and people looking for bargains more than ever?

JONATHAN JOHNSON: If we go back to how we began, periods of high beta were good for the clearance and liquidation business that we started 25 years ago. I foresee that continuing. Good times, bad times, they're always-- times of high beta is when manufacturers and retailers have inventory adjustments they need to make. That's what liquidation's all about.

That's in our future. But we're most excited about what's in our immediate future with the holiday season. We're starting a new brand campaign. I think it's going to be an exciting time for us.

JOSH LIPTON: And Jonathan, from my understanding, you're also looking for a chief marketing officer. I'm just curious how that search is going and when you all think you'll be able to fill that role.

JONATHAN JOHNSON: Search is going well. There are a lot of very qualified candidates who are interested in being part of the iconic brand that Bed Bath & Beyond is. We know that there are a lot of great candidates who, right now, are interested in us that are focused on delivering for their current employer in Q4.

We're heads down delivering Q4, too. I suspect it will be after the ground cutting-- ground shipping cutoff that we'll start bringing some of these qualified candidates in for more panel interviews. I suspect it'll be mid-Q1 where we'll have a really qualified chief marketing officer in seat.

JOSH LIPTON: Jonathan Johnson, thank you so much, sir, for joining us today.

JONATHAN JOHNSON: Thank you, Josh, Julie.