Shares of Beyond Inc., which owns Bed Bath & Beyond and Overstock, experienced a notable surge in after-hours trading on Monday, buoyed by a quarterly earnings report that exceeded Wall Street’s expectations. This uptick is particularly significant given the context of the company’s ongoing efforts to stabilize and rejuvenate its brands amid a challenging retail environment.
For the reported quarter, Beyond Inc. posted a net loss of $42.6 million, translating to a loss of 93 cents per share. This was a marked improvement from the $73.5 million loss, or $1.63 per share, recorded in the same quarter the previous year. When adjusted for equity method losses, the company’s loss per share was 76 cents. These figures were notably better than analysts’ consensus estimates, which had projected an adjusted loss of 83 cents per share on revenue of $382 million. The actual revenue for the quarter came in at $398 million, reflecting a decline of 5.7% year-over-year. Despite the drop in revenue, Beyond Inc. saw a significant increase in its active customer base, which surged by 35% to 6.2 million, aligning with the expectations of market analysts.
This positive earnings surprise led to a 7.8% increase in Beyond’s stock price after hours on Monday, offering a glimmer of hope for the company’s turnaround strategy. Beyond Inc. has been navigating a challenging landscape as it works to restore its brands and adapt to the evolving retail market. The company has been particularly focused on reviving its Bed Bath & Beyond brand online, following the closure of its physical stores last year. Concurrently, Beyond has been working on reestablishing the Overstock brand, which it had previously shut down before recently relaunching it. These efforts come amid a subdued housing market that has negatively impacted demand for furniture, a core product category for Overstock.
Beyond Inc. is also pursuing aggressive cost-cutting measures as part of its broader strategy to enhance operational efficiency. The company has reported making significant progress in reducing its fixed annualized costs by $45 million. Marcus Lemonis, who assumed the role of executive chairman in February, highlighted the strides made over the past 150 days and reiterated the company’s commitment to achieving growth and profitability. Lemonis emphasized that Beyond Inc. is leveraging its brands’ historical strengths while exploring new opportunities to capitalize on its assets through strategic partnerships and joint ventures.
Despite the recent positive performance, Beyond Inc.’s stock has faced a substantial decline of 50.9% year-to-date. The company acquired the Bed Bath & Beyond brand and its associated intellectual property last year, subsequently phasing out the Overstock.com brand and rebranding itself as Beyond Inc. in November. Earlier this year, Beyond revived the Overstock brand and implemented a comprehensive overhaul of the site to include a wider range of products beyond furniture, such as clothing and shoes.
The transition has not been without its challenges. Analysts from Wedbush have noted that the rebranding and relaunch of Overstock have created confusion among customers, particularly given the historical association of the Overstock name with discount furniture. Lemonis himself has referred to the initial decision to shutter Overstock as a “fatal mistake,” underscoring the critical nature of a successful relaunch.
Looking ahead, Wedbush analysts believe that the successful reestablishment of Overstock is crucial to Beyond Inc.’s overall success. They argue that as Beyond integrates the assets acquired from Zulily and stabilizes its operations, the company has the potential to spur growth in the coming quarters. The analysts suggest that the focus will need to be on harnessing the potential of its brands and leveraging its market position to drive future profitability. As Beyond Inc. continues to navigate these challenges, its ability to adapt and execute on its strategic plans will be key to its long-term success.