Overstock Hit by Discretionary Spending Away From Home Goods: Analyst
Overstock was a “relative winner” during global supply chain disruption, being “well-positioned with commodity/unbranded products and plenty of selection,” Wedbush Securities analyst Michael Pachter wrote to investors on Monday. But the company “suffered from shifting consumer spending” on travel and…
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entertainment post-COVID-19 pandemic, “while it exited all non-home categories,” Pachter said. Overstock will continue to be negatively affected by lower discretionary spending on home categories in coming quarters, but the company could gain share as demand for home goods rebounds, said the analyst. When supply exceeds demand and inventory is discounted, Overstock’s vendors absorb the hit and the company continues to be in a position to mark up the discounted merchandise and maintain its margins, he said.