As customers spend more time at home, Overstock.com's home furnishings business appears to have been a key beneficiary.
With home goods making up 92 percent of its revenue, the online retailer shocked Wall Street for the second straight quarter when it reported better-than-expected Q3 earnings on Thursday.
"We are really working to delight our customers," Jonathan Johnson, CEO of Overstock.com ($OSTK), told Cheddar after the earnings release.
Overstock.com saw its sales double from the same period last year, leading to a 15 percent spike in the stock price at the start of the trading session, though shares later fell into negative territory.
Overstock Crushes Analyst Expectations in Q3 Earnings Report
"I don't really know why Wall Street does what it does. I think they may have seen the second quarter as a COVID flash-in-the-pan," Johnson said. "We've certainly benefited from the tailwinds of people staying at home and furnishing, but I think it's much more than that."
Since taking over as CEO last September, Johnson has been behind one of Wall Street's most impressive turnarounds. From a stock price of under $7, the value has shot up nearly 1,000 percent in 2020.
Johnson credits the company's constant goal of "efficiency" for Overstock.com's improved profit margins.
"We have always viewed ourselves as a tech company first," Johnson explained. "We try to innovate through automation. That helps us scale where we can grow revenues without growing the cost structure too much."
The retailer estimates that before the pandemic about 23 percent of home furniture purchases were made online. Now, it believes that number has jumped to 35 percent in a matter of months.
"People are focused on improving their living area where they're spending more and more of their time," Johnson said. "For us, this is just right in our wheelhouse."
