Giving Wall Street A Chance To Cool Off? Is Jim Skelton’s Absence Hurting Its Watch Sales? ShopNBC ‘Previews’ Disappointing Third-Quarter Results

What the hell?

We haven’t seen this before. ValueVision Media Inc., i.e. ShopNBC, Wednesday “previewed anticipated results of operations for its third quarter ended Oct. 29.”

Looks like it was a bad quarter in Minnesota.

The home shopping network “anticipates” net sales of $135 million, a gain of 2 percent over the prior-year quarter’s $132.3 million.

Third-quarter net sales reflect lower than expected sales in consumer electronics and watches, which offset sales gains in the jewelry, home, health and beauty, and fashion and accessories merchandise categories. Gross profit rose about 6 percent in the third quarter versus last year, reflecting continued improvements achieved in overall gross margin.

We bet Steve Burke, head of ShopMNBC shareholder NBC Universal, will love reading the next statement.

“The Q3 expected revenue growth and its impact on adjusted EBITDA is clearly disappointing,” ShopNBC CEO Keith Stewart said in a canned statement. “Although we achieved solid sales gains across four of six business segments, these gains were largely offset by an unexpected sales decrease of approximately 23 percent in consumer electronics and lower than anticipated sales in watches.”

Is that because ShopNBC shit-canned its watch guru, Jim Skelton?

“Our goal is to build a strong multi-channel electronic retailer that provides sustainable and predictable performance while giving priority to the customer experience,” Keith said. “Over the past two years we have been rebalancing our product assortment and broadening the mix, but unfortunately sales setbacks and quarterly volatility will occur.”

They may occur, but Wall Street doesn’t like them.

“Looking forward, we are focused on nurturing, expanding and diversifying each category segment with exciting new products, programming concepts and cross-platform interactivity that will attract and delight the customer,” Keith said, quite a mouthful. “This focused effort is across all our product categories, with particular emphasis on consumer electronics, where we still have more work to do in broadening our vendor base and product mix.”

But wait, there’s much more from Stewart.

“Our Q3 revenue was also affected by an approximate 12 percent sales decline in our watches category,” he said. “We are disappointed with these results and recognize there is more progress to be made in diversifying the watch vendor base and product assortment. However, we are encouraged by the addition of a dozen new watch brands to this business segment over the past year. Lastly, we expect our four remaining product categories delivered healthy sales gains and good margins during Q3, based on solid product assortments that provide a good base for future growth.”

And more…

“Despite the specific challenges we are actively addressing, we are encouraged by our overall progress across the business and the healthy gross margins we are achieving,” he said. “We have come a long way, with work still to be done. We remain confident in and committed to our business platform and talented team, the execution of our growth strategies and the long-term potential of the business.”

William McGrath, ShopNBC’s chief financial officer, also had his say.

“Our anticipated Q3 adjusted EBITDA results will reflect lower than expected revenue growth as well as higher distribution costs associated with approximately 2 million households added in the quarter,” McGrath’s canned statement said. “Additionally, we improved our channel positioning in existing households in approximately 2.5 million homes. These incremental investments, which we anticipate amounted to approximately $0.8M in Q3 ‘11, are expected to deliver sales benefits to the company over the long term.”

And yet more from McGrath, following in his boss’s footsteps.

“Cash and cash equivalents including restricted cash at end of Q3 totaled $32.7 million versus $42.5 million at the end of Q2 2011, reflecting planned investments in inventories, working capital and capital expenditures in advance of the peak fourth-quarter selling season,” he said.

ShopNBC expects negative adjusted EBITDA in the range of ($0.5 million) to ($0.7 million), compared to adjusted EBITDA of $0.6 million in the year-ago period.

For the trailing 12 months, ShopNBC expects net sales growth of about 9 percent to $590 million and adjusted EBITDA of $11.6 million to $11.8 million, an increase of $18.6 million to $18.8 million.

The No. 3 home shopping network will actually report third quarter results Nov. 16 and will hold a conference call and webcast at 11 a.m.

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4 Responses to “Giving Wall Street A Chance To Cool Off? Is Jim Skelton’s Absence Hurting Its Watch Sales? ShopNBC ‘Previews’ Disappointing Third-Quarter Results”

  1. LadyLuke Says:

    IMO we viewers are sick to DEATH of INVICTA!! I doubt even Jim Skelton would still be able to sell the same tired looking watches today. There’s no variety & quite frankly all of their watches look exactly alike just named & priced differently! I’m sure Jim had his share of fans who purchased because of him but @ the end of the day in these hard economic times when we’re more careful with our expenditures it’s gonna rely heavily on the product & the brand. And quite frankly it’s time for Invicta to go bye bye!!!

  2. Cheryl Says:

    I don’t think people need watches like they once did. I know a lot of people who simply look at their cell phones or other little electronic devices for the time. Watches, maps, books … all being replaced by hand-held electronics.

  3. Linda Says:

    SLOPNBC and their GOD awful watches – yuck! I feel bad for Jim but that channel has the worst hosts and product of any shopping channel. I can’t believe they are still in business.

  4. Judith Lonesome-Sanders Says:

    With the best host(s) leaving ShopNBC in droves, maybe Jim Skelton knew something we did not? Bored to death as viewer, won’t be watching too much.

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