Apr. 24--Pointing to the tough economic environment, Utah's Overstock.com reported it lost $2.1 million for the first quarter of its 2009 fiscal year on revenue that declined 8 percent for the period.

The well-known online discount retailer pointed out, however, that its first quarter results represented a $2.6 million improvement over the same period in 2008 when it recorded a loss of $4.7 million.

"Consumer sentiment remained fairly weak through the first quarter," Steve Chesnut, Overstock.com's senior vice president of finance, said during a conference call with investors and securities analysts. "While traffic to our Web site was high, conversion [or the percentage of Web site visitors who placed an order] and average order size were lower than last year."

For the first quarter of 2009, Overstock.com announced it lost 9 cents per share, 55 percent less than the same quarter in fiscal 2008 when the Salt Lake City-based company lost 20 cents per share.

Patrick Byrne, Overstock.com's chairman and chief executive, noted during the conference call that in terms of generating positive cash flow from operations the company has been healthy eight quarters in a row.

"We like the direction our income statement is going," Byrne said.

In a research report issued after Overstock.com released its first quarter results, Morningstar analyst Larry Witt pointed out that despite the revenue weakness the company was able to slightly improve its

gross margin to 19.1 percent from 16.7 percent a year ago.

Gross margin is a measure designed to show how much a company earns taking into consideration the expenses that it incurs operating its business.

Yet despite that improvement, Witt said Morningstar expects the current recession will prolong the company's quest for profitability. "The company's revenue soared for many years, but growth has slowed and profits remain elusive."

Overstock.com produces approximately 25 percent of its revenue by buying excess inventory from manufacturers and retailers and selling those products on its Web site. But the bulk of its business, about 75 percent, comes from selling products on behalf of third-party suppliers.

First quarter results

Revenue: $187.4 million

Loss: $2.1 million

Loss per share: 9 cents

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