Overstock.com Inc.’s retail division is turning around, according to CEO and founder Patrick Byrne. “Retail is returning to be a source of positive cash flow rather than a consumer of it,” Byrne said in the online home goods retailer’s earnings release. Overstock is No. 48 in the Internet Retailer 2019 Top 1000.

Byrne also announced he’s stepping aside as president of retail, handing the reigns to former chief sourcing and operations officer Dave Nielsen. Byrne will continue to serve as CEO and oversee the blockchain business for Overstock.

Excluding marketing and sales expenses, Overstock’s retail division profit grew 111% during the first quarter ending March 31 over last year, Byrne said, but exact figures on that breakout weren’t disclosed. However, revenue from retail continued to drop during the quarter, falling 17.6% to $362.6 million from $440.0 million a year ago.

To continue to stem the losses, Overstock has overhauled its logistics operations in a way that Byrne says could annually save the retailer tens of millions of dollars a year, but won’t start paying off until the third quarter of this year. The logistics update includes improved integrations with dropshippers and upgrades to its freight shipping operations that allows it to offer two-day shipping to 98% of the U.S. population with just three warehouses.

Overstock plans to reduce customers’ acquisition costs through a combination of improved organic traffic and more efficient paid marketing, Byrne said. The new ad tech system went into alpha testing this week.

The number of members in Club O, Overstock’s paid loyalty program that offers free shipping and 5% back on purchases, grew by 32% year over year and members now account for 25% of overall sales in the retail division. The new ad tech system will partially focus on targeting customer who are more likely to join this loyalty program, since chief strategy officer Seth Moore says they provide a quicker return on the marketing investment.

In other earnings news:

• Qurate Retail Inc. (No. 9 in the Top 1000) generated 59% of its revenue from ecommerce in the first quarter ending March 31, according to its earnings release. That amounts to $1.82 billion for the owner of QVC, HSN and Zulily. This is the first time Qurate has broken out total ecommerce, but it didn’t provide how much online sale grew year over year. However, total sales declined during the quarter by 4.0% to $3.09 billion from $3.22 billion the same quarter last year. Qurate’s online-only brand Zulily also posted a year over year decline of 5.3% to $397 million from $419 million.
• Handmade goods marketplace Etsy Inc. (No. 16 in the ranking of Internet Retailer Online Marketplaces) reported an 18.9% increase in gross merchandise sales, or the value of goods sold through its platform, to $1.02 billion for the first quarter ending March 31. The gross merchandise sales per active buyer increased 2% over the past year, continuing the trend for a third quarter in a row.

Tariffs loom large in coming weeks’ earnings

And there are other retail earnings in the weeks ahead, including Walmart Inc. (No. 3 in the Top 1000), Macy’s Inc. (No. 5) Target Corp. (No. 16) and Best Buy Co. Inc. (No. 13), and they’ll likely outline to investors how they plan to deal with tariffs:

Major retailers account for close to 20% of U.S. imports from China, and with President Donald Trump’s administration raising tariffs on some $200 billion in Chinese goods to 25% on Friday, it could completely wipe out earnings growth across the sector, according to Evercore ISI. Higher tariffs won’t play into first-quarter results, but investors will be watching for signals on retailers’ ability to raise prices or shift manufacturing to other regions.

That ability varies widely by category: home improvement and auto-supply retailers have more pricing power than, say, fast-fashion sellers. Moving production out of China also isn’t easy. Take bicycles—Walmart has said that there are not enough U.S. producers to meet demand for the inexpensive models it carries and shifting production outside China would actually be more expensive for the retailer than absorbing the 25% tariff. Even if new factories were found, most of the individual parts would still come from China, the retailer said in a September letter to U.S. Trade Representative Robert Lighthizer.

The retailers most exposed to higher Chinese tariffs include Best Buy, since many electronics are sourced in China with long lead times and few other options; Target, due to the increasing number of private-brand goods made abroad; and Bed Bath & Beyond Inc. (No. 68) and other sellers of home goods with minimal ability to boost prices. Generally speaking, the more food a retailer sells, the more insulated it is, but that doesn’t mean big grocers like Walmart and Kroger Co. (No. 17) are totally immune.

“Tariffs remain a wild card,” said Poonam Goyal, an analyst at Bloomberg Intelligence, especially as apparel is not on the current tariff list but could be subject to additional taxes if the trade spat escalates.