The holiday season last year was pretty merry for QVC.
Domestic QVC’s revenue increased 4 percent to $1.8 billion in the fourth quarter last year and 3 percent to $5.4 billion for the full year, the company reported Thursday.
Gross product revenue increased 4 percent compared to the prior year fourth quarter, average selling price (“ASP”) increased 8 percent from $56 to $60.35 and units sold declined 3 percent.
U.S. revenue, however, maintained a 4 percent increase overall due to an 8 percent increase in shipping and handling revenue as a result of a price increase implemented in the fourth quarter.
For the full year, gross product revenue increased 4 percent compared to the prior year due to a 9 percent increase in ASP from $51.19 to $55.74 and a 4 decline decline in units sold. The decline in units sold resulted in a decline in shipping and handling revenue bringing the overall revenue growth down to 3 percent.
Fourth quarter and full year sales showed strength in electronics, home and accessories products. For the full year, these increases were partially offset by a decline in jewelry product sales.
DECLINE IN JEWELRY! That probably means QVC will be cutting back on it even more! Damn.
In the fourth quarter, QVC’s eCommerce revenue increased 16 percent to $712 million and increased to 40 percent from 36 percent as a percentage of total domestic revenue. For the year, eCommerce revenue increased 15 percent to $2 billion and increased to 37 percent from 33 percent as a percentage of total U.S. revenue.
“QVC’s success in 2011 is a result of our strategy to engage customers with compelling content and unique products at a great value. This focus has allowed us to expand our global market leadership in video and eCommerce retail, despite a tough economy,” QVC president and CEO Mike George said in a canned statement.
“We gained new customers at a record pace by engaging people who love to shop across all our platforms,” he said. “We sustained our 10 quarter track record of double digit eCommerce growth, and established ourselves as a global leader in mobile retail.”
George had plenty to say about QVC during the conference call today with analysts. Here are quotes from a transcript provided by Seeking Alpha, http://seekingalpha.com/article/388871-liberty-interactive-s-ceo-discusses-q4-2011-results-earnings-call-transcript?part=qanda
“We introduced 3.1 million new customers to our brand worldwide and achieved a strong 14 percent growth in revenue from new customers for the year,” George said on the call. “We took our content to the next level with destination remote broadcast for the Oscars, the Food & Wine Classic in Aspen, and Fashion’s Night Out in New York, we partnered with Vogue for 25 to Watch campaign. And we built ‘In The Kitchen with David’ into one of the most popular cooking shows on any network.”
He added, “And we continue to drive growth through an assortment of highly differentiated product offerings. This is [Wen] in hair care with it’s devoted following, Liz Claiborne in New York and Susan Graver in apparel. In jewelry the breakout drusy gem category along with prestige launches like John Hardy and Heidi Klum … In kitchen electrics and consumer electronics, we saw great success with the wide assortment of tablets and e-readers from the Dell Streak to the Toshiba Thrive, the Nook in the iPad.”
Love the drusy.
Matt Harrigan of Wunderlich Securities, who we interviewed when we were working for Multichannel News, had an amusing question.
“I guess as QVC recasts itself and I guess becomes even hipper, if that’s possible, in terms of the customers, are you seeing even more evolution in the product categories you are trying to emphasize, balancing the bar bell of the new customers and the established homes … in terms of the what they are like?” Harrigan asked.
George answered the question.
“All the initiatives we are pursuing we see as giving us gains, both with existing customers and new customers,” he said. “So part of it is this platform expansion being available in more places. eCommerce new customers are younger than TV new customers, mobile customers are younger than eCommerce new customers. We have a disproportionate share of new customers coming in through various forms of eCommerce. That’s part of it, both in businesses like beauty has driven in a younger customer and a lot of the things we do to create buzz and publicity, including our Oscars event tonight. I think all of that’s a broader range of customers.”
George continued. “So we continue to feel good about how our brand is being positioned and feel like we continue to sort of broaden the relevance of the brand across all age groups. One of the things I’ve shared in the past is that the average age of our new customer is slightly younger than the average age of adult female population. I don’t know if that trend will accelerate, but we think we will see it continue.”
QVC’s consolidated revenue, which includes the domestic home shopping network and all the international ones, increased 5 percent in the fourth quarter to $2.6 billion and 6 percent to $8.3 billion for the year.
QVC’s international revenue increased 7 percent in the fourth quarter to $857 million and increased 11 percent to $2.9 billion for the year. The fourth-quarter results included the negative impact of the strengthening of the US dollar against the euro and pound sterling that was offset by the weakening of the U.S. dollar against the Japanese yen, whereas the full-year results included the positive impact of favorable exchange rates in each of QVC’s markets.
QVC Japan’s market has rebounded after the tragic events experienced in March with positive sequential full year and fourth-quarter growth compared to the same periods in 2010, with fourth-quarter revenue being the highest in QVC Japan’s history.
QVC Japan’s revenue grew 6 percent and 1 percnt in local currency in the fourth quarter and the full year, respectively. The increase in the fourth quarter was due to increased sales primarily in electronics, home and apparel. For the full year, increased sales in apparel were offset by declines in jewelry and beauty.
margin decline of 69 basis points for the year was primarily due to the negative leverage impact associated with lower sales as a result of the events experienced in March 2011.
QVC Italy continues the trend upward with a 56% sequential sales growth in local currency over the third quarter of 2011 driven primarily by sales in the home, beauty, jewelry and apparel product categories during the year. QVC Italy successfully launched an eCommerce and mobile optimized website in the quarter to strong consumer response and will seek to continue to build a leading multiplatform business in Italy.