Overstock.com (OSTK) surprised shareholders on Friday by disclosing an unexpected fourth-quarter loss as the discount e-retailer grappled with higher costs.
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The bleak news sent shares of the Salt Lake City-based company retreating more than 10% in early trading.
Overstock.com said it lost $3.4 million, or 15 cents a share, last quarter, compared with a profit of $14.9 million, or 63 cents a share, a year earlier. Analysts had been expecting a profit of 45 cents per share.
Revenue slumped 10% to $314.1 million, badly missing the Street’s view of $377.6 million. Gross margins fell to 16.2% from 17%.
Overstock.com was hit by higher costs, including a 10% rise in sales and marketing expenses to $18.9 million and a 24% leap in general & administrative/technology expenses to $34.1 million. The company also cited higher inbound and outbound freight costs.
Shares of Overstock.com dropped 10.9% to $6.16 Friday morning and at one point sank to a new 52-week low of $6.08. The company’s shares were already off 12% in 2012 and 55% from a year ago.