ShopNBC Racks Up 6 Percent Sales Gain In Second Quarter

No. 3 home shopping network ShopNBC posted a strong second quarter Wednesday, with net revenue rising 6 percent versus last year, to $126.2 Million.

ShopNBC also reduced its losses compared with the year-ago period, to just $1.9 Million From $5.7 Million.

But for the first six months of the year, ShopNBC’s sales have dipped slightly, down just a hair under 1 percent to $251.2 million.

An another top company official, senior vice president of merchandising Kris Kulesza, is exiting effective Aug. 20. His position won’t be filled.

“We are pleased with our second quarter progress, reflecting another consecutive quarter of overall improved performance,” ShopNBC CEO Keith Stewart said in a canned statement.

“Positive customer activity trends and strong gross margin rates, along with disciplined execution in merchandising and financial planning, helped drive the business on the top- and bottom-line,” he added. “Going forward, we recognize there is still much work to be done. We continue to prudently manage our working capital while focusing on increasing the top line through improved merchandising strategies, aligning price points with consumer demand, and refining our customer outreach initiatives during the second half of the year.”

Second quarter revenues rose 5.7 percent to $126.2 million. As part of its on-going strategic initiatives, the company further lowered its net average selling price to $97 from $112 in the year-ago quarter, while increasing net shipped units by 22 percent.

E-commerce sales penetration represented 39.4 percent of total company sales in the quarter, up 860 basis points from the prior-year period.

Customer trends continued to improve with new and active customers increasing 39.5 percent and 26.5 percent respectively, on a 12-month rolling basis versus the same period last year.

Return rates for the quarter declined to 20.6 percent versus 21.8 percent in the year-ago quarter, reflecting improvements in
overall customer satisfaction and the benefit of strategic pricing changes.

Gross profit increased 13 percent to $47.2 million and gross profit margin improved 260 basis points to 37.4 percent versus 34.8 percent last year, largely driven by merchandise margin rate improvements across several key categories.

Adjusted EBITDA was a loss of $1.9 million compared to an adjusted EBITDA loss of $5.7 million in the year-ago period, driven by improvements in sales and gross margin.

Operating expenses in the second quarter increased roughly 2 percent to $53.4 million, as a result of the company’s net sales growth.

Net loss for the second quarter declined to $7.7 million compared to a net loss of $8.2 million for the same quarter last year.

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