Q1 2023 Overstock.com Inc Earnings Call
Speaker 1: quarter of 2023 Overstock.com Incorporated earnings conference call. At this time all participants are in a listen-only mode. After the speaker's presentation there will be a question and answer session. To ask a question during the session you will need to press star 1 1 on your telephone.
Speaker 1: You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 again.
Speaker 1: Please be advised that today's conference is being recorded. I would now like to hand the conference over to our speaker today, Lavesh Hemnani. Please go ahead.
Speaker 2: Thank you, operator. Good morning and welcome to Overstock's first quarter of the 2023 earnings conference call. I'm Ladeh Shemnani, head of investor relations. Joining me on the call today are CEO Jonathan Johnson and CFO Adrian Lee. President Dave Nielsen will be available for Q&A.
Speaker 2: Our slide presentation accompanying today's webcast has been posted to our investor relations website and is available to download. Next slide, please.
Speaker 2: Please review the important forward looking statements disclosure on slide 2 of today's presentation. For following discussion and our responses to your questions, reflect management reviews as of today, April 27, 2023. I may include forward looking statements.
Speaker 2: Actual results could differ materially from such statements.
Speaker 2: Additional information about factors that could potentially impact our financial results is included in our Form 10-K for the year ended December 31, 2022 and in our subsequent filings with the SEC.
Speaker 2: During this call, we discussed certain non-GAAP financial measures. The slides accompanying this webcast and our filings with the SEC contain important additional disclosures regarding these non-GAAP measures, including the conciliations of these measures to the most comparable GAAP measures.
Speaker 2: Following management prepared remarks, we will open the call for questions. To ask questions, please use the registration link available under the event section of our Investor Relations website. Next slide please.
Speaker 2: During today's call, we follow the agenda on slide three. With that, let me turn the call over to our CEO , Jonathan Johnson.
Speaker 3: Thank you, Les. Good morning, everyone.
Speaker 3: This morning we reported our first quarter 2023 financial results with revenue in line with the expectations we shared with you in February . For the quarter revenue declined 29% year over year. On a home only basis.
Speaker 3: Revenue declined about 27% year over year in improvement in trend. We are encouraged by these results.
Speaker 3: particularly how we were able to improve results later in the quarter. We look forward to the key spring summer selling season. Thank you.
Speaker 3: I am pleased with the focus of the Overstock team as it has delivered another quarter.
Speaker 3: of positive-adjusted EBITDA, our 12th consecutive quarter of positive-adjusted EBITDA. That's three full years of consistent positive performance.
Speaker 3: This is a testament to our asset-like business model and the team's disciplined operational approach.
Speaker 3: Adrian will discuss these results in more detail later.
Speaker 3: discuss these results in more detail later. Next slide.
Speaker 3: We shared this slide last quarter.
Speaker 3: It highlights how we continue to expect 2023 to be a tale of two halves.
Speaker 3: This is a year of inventory rationalization for the industry.
Speaker 3: something that is taking longer than most expected.
Speaker 3: It is also a year of rebuilding for overstock as we get back on track to retaking market share profitably. We remain confident in our ability to execute against our plan to turn around top line performance.
Speaker 3: As a result, we reiterate our current expectations for a better second half compared to the first half of 2023 in terms of both top and bottom line performance. We continue to make meaningful strides in expanding the depth and breadth of our home product assortment.
Speaker 3: More on this later
Speaker 3: I will note, while recent volatility in the financial market certainly adds another wrinkle of macro concern, neither Overstock nor any of the Medici Ventures portfolio companies were directly adversely impacted by the recent regional banking crisis.
Speaker 3: Overstock's healthy balance sheet places us in a strong position to navigate the various uncertain macro and industry conditions that exist.
Speaker 3: It is not clear whether we will face additional headwinds from growing negative consumer sentiment or cutbacks in spending in our category from tighter liquidity or credit availability.
Speaker 3: However, this uncertainty is not impacting our team's focus on improving our business performance.
Speaker 3: We continue to make progress on our strategic growth drivers and maintain our focus on efficiency.
Speaker 3: Next slide.
Speaker 3: On this slide, we provide additional information on our home-only active customer base, which we report on a trailing 12-month basis.
Speaker 3: As a reminder, we fully exited non-home merchandising categories at the end of June 2022. While our strategic focus on home has caused some pain in the short term, we continue to believe it was.
Speaker 3: and is the right decision for our future.
Speaker 3: On the left, we show our home only active customer base over the last four years. This base dated about 8 million customers at the end of 2020 during the high-of-the-pandemic. A shift in consumer talent and consumer spending preferences over the last two years.
Speaker 3: customers at the end of Q1.
Speaker 3: We have been able to attract new customers and retain many existing customers by executing on strategies to increase our presence in the large and fragmented furniture and home furnishing market.
Orders delivered for 7.5 million for the trailing 12 month period. This is a decrease of 39% compared to the prior year or 4.8 million orders as I discussed earlier.
The decline was primarily driven by weak consumer sentiment and a shift in their spending priorities along with the cumulative impact of nonproduct removal from our site or.
R. A O V and revenue practice <unk> customer matrix continued to support our future of being a home only online retailer next five place.
This site provides a recast the view of our business, excluding non home revenue, which allows for a more direct comparison to our peers.
As you can see on the charge on my left at the end of the first quarter, a comparable home related active customer base declined 29% versus the reported 35 per cent <unk>.
<unk> on the right illustrates that are comparable home only revenue declined 27% year over year versus the reported 29 per cent on a sequential basis the impact of the nine home category removal has moderated as we near the completion of laughing online home sales over the last 12 months.
Next slide please.
I will wrap up my financial discussion highlighting are strong balance sheet and minimal debt obligations each of which continues to be a highlight in differentiator for overstock are strong balance sheet gives us the opportunity to focus on executing against our key growth drivers and being opportunistic on capital deployment, it's important to note that our cashback.
<unk> increased quarter over quarter, even after directly investing $10 million in Grand Chang and investment that we believe has promise of a healthy return.
We generated positive free cash along the corridor maintained a laser focus on expense management and realize operational efficiencies will slightly improving our top line trend.
All of this enabled us to maintain a solid balance sheet, whether uncertain market conditions and invest for market share growth.
That back to you Jonathan.
Can I get your address and thank you for protecting our strong balance sheet real differentiator in the market.
Next slide.
Next I'll provide some updates on how we are making progress on our strategies to return to gaining market share.
Next slide.
We regularly share this flywheel, both internally and externally has it outlines are key drivers to deliver growth.
And it helps us maintain focus on what matters most.
At first that are critical to both our short and long term goals.
Well, we just drove the drivers are not new we're always discussing an evolving their underpinnings to improve performance.
Cause I've noted before none of these growth drivers is particularly capital intensive.
Importantly, all of them fit squarely within <unk> mindset.
Help us increase order frequency.
Retain and attract customers gain marketshare.
These are the right growth strategies for us.
We are confident we have the right processes and the right people in key positions can lead our growth initiatives <unk>.
These drivers focuses on the discipline stewards of our healthy balance sheet and delivering growing positive adjusted EBITDA.
Excellent.
How about a notice while our growth drivers does not change we are routinely assessing and deploying new tactics to improve our performance.
Tactics are guided by our three brand pillars unexplained ability.
Smart value.
Easy delivery and support each of which are integral element differentiator of overstocked business.
Today I'll share some color on recent wins, starting with loyalty offerings.
Following the completion of our transition to 100 per cent home online retailer last year, we have been focusing our efforts on enhancing our loyalty offerings.
The current environment, where the customer is less engaged in the overall home category.
We need to ensure that our loyalty programs are compelling enough to attract new customers.
Sorry, my providing such benefits and special finance offerings or exciting an app deals and exclusive.
Our newly launched co branded credit card with Citi retail services.
Progressing well.
It's been just over two months since the launch of the number of sales <unk> card orders.
Small sign ups have been as we generally expected an order values and conversion rates are higher mmm accompany average.
We continue to believe these cobranded cards will help us to better market directly cause these card holders and personalise our offerings to that <unk>.
Something we've not done, particularly well in the past.
The next step in our loyalty efforts, we will be refreshing our private label store card later this year.
Combination of these two cards.
Clabo program.
And strong engagement through the mobile App should help overstock attract new customers and when repeat business more frequently.
Important topic skew experience <unk>.
During the first quarter, we expanded our home product assortment by nearly 20%.
<unk> is the head of our internal plan.
Comes on the heels of doubling our home assortment over the past two years.
While we continue to grow the depth and breadth of our product assortment, we are still well below some of our competitors.
No we have work to do.
We're doing that work.
Merchandising organization is focused on expanding breadth of skews across the good better best spectrum.
Oh, you're into our smart value Brown color.
That was gonna happen.
Within a rugs business, we'd have great relations with our partners and always have access to new and exciting products. However.
However, as weird fee increase demand from the home customer for additional differentiated options.
Growth opportunity to expand our Roger store.
We expect to see more new products available during the second half of 2023.
Our partners redeploy cash that has been stuck in the industry wide inventory glut.
We have also been improving our posts purchase customer experience.
Last year, we talked about how we are diversifying our fried carrier networks.
This has contributed to an improvement and are less than truckload or L. T. L delivery timelines using what can sometimes be a pain point for our customers and negatively impact R. M. B S scores.
We've made significant progress is improving delivery times during the first quarter of 2023.
Customers are now receiving L T L shipments to a stroke.
We also continue to make improvements in delivery times her small parcels deliveries and have done so without investing inexpensive logistics infrastructure.
Another two delivery metric that has improved.
Accuracy of the.
Delivery time messaging or the estimated delivery date shown when a customer places in order.
<unk> on time accuracy improve nearly 500 basis points in Q1 compared to queue for.
It is important that our customers receive their products on the estimated delivery day.
A day earlier.
Not a day later.
That is happening more often.
You can see that the entire overstock team is focused on our brand pillars and growth drivers.
Next slide.
We continue to direct our efforts to get back to delivering sustainable profitable market share growth within our financial recipe card.
We have clear and focused strategies to deliver performance.
With these charges.
Cause financial framework is the right operating model for us and the medium to long term.
Choosing these metrics continues to remain difficult in 2023, I am encouraged and we performed in line with our gross margin and free cash flow targets during the first corner.
Before we take your questions.
I will provide some color on quarters as a trend.
Expectations for Q2 and beyond.
As I indicated previously we saw an improvement.
Revenue trend in late two one which improved to the negative low twenties range in March.
This negative low 20th performance has continued in the April thus far.
We are being cautious and our expectations for the rest of the quarter with a big portion of the spring Summer sales is still ahead of us.
Alright, I'm hopeful for continued improving trends.
It's just too early to know how the corner will go.
There remains uncertainty around consumer stomach.
Housing market remains under pressure.
The Sooners continue to allocate dollars to services, such as travel and recreation.
As a result.
Demand environment for discretionary home related purchases remains unpredictable.
For one more quarter, we are still comparing against not home sales, which impacts are year over year revenue Trent.
Regarding profitability.
We expect to.
Deliver positive adjusted EBITDA for two two.
As I indicated previously getting back to our mid single digit adjusted EBITDA margin goal is going to be difficult. This year. However, we want to reiterate that we expect to deliver positive adjusted EBITDA for the corner.
And the year.
Her ability to live by our profitability Kenneth.
And our strong balance sheet differentiate among peers.
This will continue in 2023.
No operator.
Let's take some questions.
As a reminder to ask a question. Please press tier one line on your telephone and wait for your needs to be announced to withdraw. Your question. Please <unk> why you went again.
Participants are requested to ask one question and one follow up question and go back into the queue for additional questions.
Please stand by while we compiled the queue any luster.
One moment please.
Our first question comes in from the line of Thomas fourth or fifth G. Eight David <unk>. Please go ahead.
Great. Thanks for taking my question, so Jonathan it's been more than a year now since David <unk> became C 020, when can investors expect additional details and a strategy for leading two zero.
In addition, how should investors think about the current competitive environments at two zero given some of the challenges large players are facing right now.
Such as one that's involved in a lawsuit with the S. A C K.
Alright.
I'm sorry here I appreciate that question.
The clothing of the ice investment around wasn't materials. After two zero in this capital infusion certainly helps should help two zero <unk>.
Strategies to accelerate growth.
Two zero recently sharpened its focus with the closure of crypto trading.
Companies and investors raise.
Capital in primary and secondary markets.
Now to your question about when to expect future. After it's difficult for us to put a timeline since overstock is not a ball and.
The day to day operations.
You know to the extent, we can overstock does provide updates on two zero and the other companies and emergency portfolio.
No cheese <unk> portfolio.
I would encourage you and everyone else to tune into the upcoming Medici Ventures day on may 31st for additional insights into two zero <unk>.
Participating companies you can also submit questions related.
<unk> two zero anyone else participating in the event, where you go onto our Investor website.
No one no one other thing.
A lot of people in this space.
Then I think showing what they don't have.
David Good as a trusted operator.
He will report on what is delivered.
Rather than I'm already hosted the leather.
Industry follows <unk>.
<unk> F T X and.
S S B F.
We're glad to have someone.
I'm just gonna.
Say, what he's done.
Rather than promise something that may or may not get that.
Thank you Jonathan.
Mmm.
One moment for our next question.
Our next question comes from the lineup Steven Forbes Gegenheimer Securitas. Please go ahead.
Good morning.
Jonathan I wanted to start with a new marketing campaign. So curious if you can expand on how the customers responding.
Over the over the recent weeks right, especially just given the state of promotional activity in the marketplace today love any color on an engagement trends.
Okay, I'll I'll start and I'll I'll look today to add more explanation.
The market right now is frothy with people spending what I would say is from time to time rationally.
We've seen that most recently some of our competitors will spike up marketing spend in a way is it just seems.
Well, that's a bit are tired I'm, making money I'll, just say it that way it doesn't fit are kind of making money.
We are spending our marketing dollars judiciously re brown expanse sure we could spend more give it out in front of more people, but to do so would make money is hard.
Dave I think we're the market's responding relatively well the first thing your account for you of course is your treasure. Your your home your treasures very very new it's hard to have a read on that.
What would you say that.
Your day.
Still in the <unk>.
[laughter] the information the information we received you know it's always difficult with.
With television and with the commercials in general, but when you get to you too where you can get some actual click data, it's really interesting to see in the click data from get comfy, we over indexed and the performance on this commercial it resonated with the customers.
We're only a weekend on your home your treasurer, but we like what we see it's from the same group that developed get comfy with our creative team.
We're optimistic there's some there's some catching us to it that we think will help really focus on our small valued customer.
Hi, Kevin since David Thanks for the question.
Sure thing and just a quick follow up <unk> you mentioned, the 20 per cent assortment expansion during the quarter.
Is there anything you can comment on whether you're you you saw a sort of an immediate impact or whether you expect to see one.
Over the coming weeks here on the back of that if somebody expansion and then and then if you could just comment on how the assortment is expected to evolve throughout the remainder of 2023.
Sure.
Hello, This is Paul <unk>.
<unk>.
23 will continue to expand breadth and depth.
I do think there's.
There was opportunity in queue for as we expanded into small appliances is one of our competitors were.
On the ropes and many of its suppliers were eager to expand their distribution channel and overstock with a good.
Partner there.
That will continue.
Is on the rocks man dashed on the Shoals. So we we we.
We see continued opportunity there Dave I know you are at high point market. This weekend and earlier this week.
The address.
You know just that we're seeing the product conditions.
These partners of ours, and our <unk> light model, while they have been strapped as Jonathan mentioned with the inventory glut their cash being tied up in in their current inventory of statement.
They are.
Product generating product creation.
<unk>.
Powerhouses and all of our partner base are looking for ways to innovate adjust to the cost pressures and many different things going on and all three packaging and the way things are shipped to cut costs. So there's a lot of different ways to innovate and add new products that are partners are very involved in it.
Ah merchandising teams are very involved in that with those partners.
And those words will always include and are particularly focused right now on good better best we're in the right categories. It's just expanding the offering in that way.
Also tell you Stephen.
Our burgers like we treat them as partners.
They're squeezing me.
Yes, we're always want the best price, there's some of that back and forth as there is in any business.
Who would pay them quickly.
We're not in the business of Disintermediated ma'am.
And treating them unfairly.
We win.
Our customers when.
And they were.
This is a three legged tripod, where everyone with <unk> and our.
<unk> get that and it's why <unk> why we think we're growing our breath and to have to excuse faster and our plan I've gone away. We're gonna Sandbagging plan was a push to grow plants.
Thank you.
Yeah.
Okay. Our next question.
One moment please <unk>.
And our next question comes from the line upset segment of Barclays. Please go ahead.
Great. Good morning, everybody. Thanks for taking the question. My question is really around the improvement that you saw throughout the quarter Uhm. It does seem contrary to what other companies have been discussing can you just comment on that do you think it's more specific to overstock, maybe something you're doing with discounting or.
Or marketing or do you think it reflects I guess, a broader stabilization or improvement in consumer demand and then I have one follow up thanks.
Yeah, and I'll comment I would love to get David's thoughts on this one too.
I don't think our improvement rep.
Represents a broader stabilization is consumer demand.
I think the customer the consumer is still under tremendous.
Oh sure.
And has become very much.
Savvy shopper <unk>.
A smart value seeker.
And when she shops, if you're going for a good deal.
One that we provide.
I do think our team took extraordinary efforts.
And tried to.
The last third last month of the first quarter.
Spent a lot of time together.
Improving our collaboration so I think there was some.
Better execution can we've had.
So I think for us it came to really strong execution maybe.
You can.
Talk to some of those specifics.
Yeah. Thanks for the question Sir.
It's interesting I I just can't.
Put an emphasis enough on jonathan's comments around the pressures and the market by the consumer and we see it every day.
We watch our competitive pricing in our competitive K P. I was like a hawk and compare them to several of our peers in the industry and there's been a lot of focus I'll just put it up that I won't get into detailed specific product strategies, but I will tell you.
A lot of focus around the discounting of the right products can make a difference.
Jonathan.
Debit great great color I.
Consumers are going to continue to be under.
Pressure and I think that's where a smart value makes it makes a difference you know I I figure about the looming.
It is.
Student <unk> repay her loans that have been on like 24 month hiatus that'll be pressure on the economy I think the feds James.
Bound and determined to keep raising the rate that'll be pressure on.
Mortgage rates, which are impact or industry, so being able to run a business lamely offer smart value and turn a profit.
Is crucial.
To getting through what ever canyon of recession or pull back we're in and I think we'll be in for awhile and that's.
That's why we run the business the way we do.
Or positive adjusted EBITDA right now.
Right I'd love to follow up on pricing and a O V. E. O B was down this quarter I'm curious is that related to discounting or are you actually rolling back prices I guess in general I'm curious if you could discuss the tools in place today, maybe what's different versus the past two effectively ma'am.
<unk> pricing and maintain a value proposition in this environment, where prices do seem to be coming down across the industry I assume that's different than the.
The last two or three years when everything was just going up so I guess like what's changed in your process and the tools that you have to more effectively manage that value proposition.
Yeah.
And your initial comment on that very day, if you can add to that.
Sure Uhm stuff I can kind of discussed the a O V kind of year over year, which is I think relatively flat slightly down I would say, there's kind of three main things that's attributable to all of which we mentioned in our prepared remarks, clearly discounting did increase year over year, so that impacted our gross margin and a O V. We did say kind of in my room.
Mark's too we have seen some trade down now for us that's not a bad thing we want to make sure that we need the consumer where they are and and the price points they need and then <unk>.
Third is we you know, we just kind of seemed some cost inflation and as we've talked about that yeah. That's really important for us to pass that onto our customers. So they can realize that smart value tenants I would say those are about the three things primary impacts of our it'll be year over year Dave.
Thanks, <unk> in terms of our pricing mechanisms and how that's changed again, we're all set like this is not internally bill so we use external resources, who.
Crawl the different markets with thoughts to understand where we sit versus our competitors on unlike products.
I won't get more into the details than that other than to say, it's just a maniacal focus on being <unk>.
That's smart value offering to our customer.
Thanks, Dave.
I understand we got a number of people over here in about 15 minutes, you'll get a little crisper on her answers.
I won't get Christopher on my answers I know I haven't made a finger.
Operator.
One moment for our next question.
Mmm.
Our next question comes from the line of <unk>, a frame and James. Please proceed with your question.
Thank you and good morning, everyone can.
Can you talk about the potential to gain share from the developments at bed Bath and beyond you know anything you can share about what you could do differently to go after those customers since I think they would also be pretty heavily focused on smart value.
Yeah right Great question, you know it's.
We operate in a large fragment of marketplace or whenever there is widespread.
Created by any struggling competitor.
We view it as an opportunity to capture market share we view it that way and the third and fourth court and you saw we got into small appliances in a bigger way.
And did well there.
We are well aware the bed Bath and beyond has filed for bankruptcy and our suppliers are well aware.
Filed for bankruptcy.
Nowadays was in high point this week suppliers that are supplied to bed bath and beyond or looking for expanded distribution channels. So you've been ones that bear with us want to use us more so we think there's some real opportunity.
Okay.
Market share.
Course with partners and perhaps.
Otherwise, but I don't want to comment specifically on the steps we may.
May not take to maximize.
Our ability in this situation.
And then a question on gross margin you had your your increased despite pretty widespread promotional activity in the market place and and you touched on merchandise actions and operating efficiency can you provide additional color on on on those areas that are offsetting the higher discount and as a father.
<unk> I think you touched on gross margins being get plenty of two per cent gross margin level being the right level going forward. It did a little bit better than the first quarter and it was suggested a year over year decline at 2023 moves forward any thoughts on that would be great.
<unk> <unk> 22 per cent ish.
Yeah. She was a little wiggle room, I think one of the reasons were able to maintain.
Consistent gross margins in a time of inventory glad in liquidation.
<unk> business model.
We did not buy on on.
That inventory.
Then we had the luck with it and we work closely with our partners to help them move their inventory.
But it or.
Gross margins.
I can't say enough how much I like our asset life business model.
Particularly when you're talking about.
The ability to maintain gross margins, we don't make that inventory and we kind of <unk>.
Control that and we liked the number 22% ish one.
<unk> <unk>.
Rick asked you about promotions and other things any any comment on that please.
You know <unk> like you said, we mentioned merchandising actions and operational efficiencies you know this kind of happened quarter and quarter out at different magnitudes, just things like negotiating with partners things like you know what kind of sponsored product opportunities customer care efficiencies warehousing improvements. So we're always looking.
Kind of in those buckets and quarter and quarter out trying to improve our results there.
Thank you very much.
Iraq.
And we'll make sure our next question.
And next.
Our next question comes from the line of Anna and driver.
Please go ahead.
Great. Thank you so much and good morning, guys. We had a question on <unk> I guess, that's to Adrian you guys have managed at the in N out very well for a number of quarters now <unk> <unk>, a little bit and <unk> on a smaller sales decline.
So could you provide some color on how we should think about expensive as we go through the year can you still manage dollars down double digits, even on top of the prettiest significant declines for last year, especially as we laugh the back half and secondly to Jonathan apologies.
If I missed it <unk> expect it to be speaking at the Investor day coming up and just any color on perform it sir thank you so much.
Sure Let me address a second piece first and then turned to address the address of the first Ah bedroom will not be participating.
Yeah.
She ventures day for companies that are listed on the slide there will be there.
I hope your submit some questions on our Investor Relations website do so this week, so we can get them to.
Ahead of time, I think it's gonna be and enlightening.
Just before I turn it to Adrian Opex expenses.
Can we continue to.
Deleverage down two zero of course not of course, not but you see.
Cause we've come out of the pandemic and consumer trends have changed in our sales have declined.
We've been able for now 12 consecutive quarters.
Positive adjusted EBITDA Maniacal about expense control, yeah, we can't bring maniacal down to zero. That's why we're very focused on improving top line sales, we like the fact that.
Trend is.
Reversing it seems to be I mean, it's still down first.
First to admit it but.
It's getting it's getting better and that's the beginning of getting it fixed.
<unk>, probably stole your Thunderbird, if you want to add anything.
Not at all Jonathan I, just think you know on it as we mentioned kinda that's 50 million per quarter is about where we run on average you know and I think when you think about our kind of revenue and expense.
Don't think that the kind of declines as you mentioned will will uhm match right just because it's Jonathan mentioned, we can you know go down so far on Netflix base costs, but we're always looking for efficiencies in ways to you know make that number is is small and efficient as possible while delivering a profit.
And I was good at Adrian Adrian a very nice job.
Is very expensive.
A extra <unk>.
Extra expenses, we've been able to bring out of Iraq.
We're after recorder. This is a theme and knows how to run efficiently and Adrian <unk> do.
Do that even better.
Alright, so I really thank thank you so much <unk>.
Welcome.
Getting our next question.
Our next question comes from the line of credit to Snuggle B O F. A please proceed beat your question.
Great. Thanks, very much just just a quick one on ebay.
I appreciate the the color.
[noise] rest of the year, just first of all a little bit more I think I'm a prior call.
You mentioned that you know not every quarter will be profitable should we now expect that.
So we've got to keep profitable same for three two and four two or was there some.
[noise] variability there.
Curtis you well remember my words February good for Ya.
Someone's listening.
<unk>, we're pretty clear, we expect to have a positive adjusted EBITDA.
Second quarter I would expect to have for the year.
Talk about a tale of two halves with the first half the probably the hardest task Zaire so.
That.
Take that for granted for what it's worth but we feel like we.
Trying to think I can figure out a word in Japanese but I can't think of anything goes we feel like we kind of kept going through Q1.
Well.
It out.
You know.
3 million dollar adjusted EBITDA.
You know Q2's generally bigger than Q1 on the revenue side. So here we are.
Okay sure enough and I guess I'll stick on the topic in terms of.
So it's progression and like I said tells you have two <unk> two eight should be better in terms of just like its ranking sort of what what the.
Most important drivers would be soon just compare some degree more inventory in a marketing all all that how does the macro or just just consumer fit into that.
So the growth drivers are on the flywheel slide Rochelle, they haven't changed <unk> those are the things that drive our business and they're.
Pretty standard running a business the way we're supposed to run it the macro will impact macro has it back but I mean, the last two years.
<unk> sentiments have changed you know.
Mmm folks are buying as much patio furniture, when they're spending.
Hundreds of thousands of dollars to go to Paris Swift you know it's just.
People are doing different things today and they were doing during the pandemic as I mentioned, you know prepared continues to raise rates and mortgage rates cause.
That's hard so.
Macro is what makes us.
Okay.
The one thing on my desk, we get questions a lot about the cash position.
Wow I woke up.
And it lets us look at things in a way that our competitors camp.
Yeah, I think the worst thing a company can do as dumb M&A.
Cause you get excited about a deal.
Do something that enhances our home brand.
It's consistent with our S M Y business model.
Something that moves us forward, even with all the difficult synergies or you know putting things together that is that M&A involved so.
I know, we've got more cash than maybe 40 per cent tomorrow cast probably a ratio.
Most people think it's too much but we think it's rather have it than not have I guess, that's what I'd say Peter.
Okay, I'll I'll leave it there thank you very much.
Alright, well everyone. Thank you.
For joining our call.
You've been in a tough macro and industry environment.
I'm bullish on the overstock business.
We're arresting our top one slide.
We live by our profitability Kenneth.
These allow us to maintain our strong balance sheet.
The last question I wanted to.
Thank you for participating in today's call. We appreciate your interest in.
Ownership all.
Overstock.
We're gonna keep doing the best we can to make that a good investment for everybody. Thanks.
This concludes today's conference call. Thank you for participating you may now disconnect.
Mmm.
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