HSN’s net sales increased 3 percent in the first quarter, to $541.9 million from $526.2 million, the home shopping network reported Wednesday.
Digital sales were up 8 percent, with penetration increasing 170 basis points to 34.9 percent.
Sales grew primarily in beauty, home design and culinary, offset by sales declines in electronics, fashion and fitness, the network reported.
The average price point decreased 2 percent and the units shipped increased 3 percent, primarily due to changes in product mix. The return rate decreased 140 basis points to 19.3 percent from 20.7 percent. The prior-year return rate included an adjustment for higher than anticipated returns of certain product sold in the fourth quarter.
Gross profit increased 6 percent to $188.4 million. Gross profit margin improved 110 basis points to 34.8 percent from 33.7 percent. The margin increase was primarily attributable to the product mix shift and lower transaction costs, partially offset by higher shipping and handling promotions.
Adjusted EBITDA increased 10 percent to $57.3 million compared to $52.2 million in the prior year. The increase was due to the growth in net sales and gross profit margin, partially offset by an increase in operating expenses. Operating income increased 16 percent to $47.5 million compared to $40.8 million in the prior year.
Net sales for HSN Inc., which includes the home shopping network and the Cornerstone unit, jumped 5 percent, to $747.3 million from $710.6 million.
“HSNi had a strong first quarter both in terms of financial performance and in delivering on our strategies around customer growth and digital expansion,” HSN CEO Mindy Grossman said in a canned statement. “We also continued our efforts to improve our capital structure and drive shareholder value. We executed on our share repurchase program, announced our next quarterly dividend and closed our new credit facility, providing us with additional financial flexibility.”
We’ll listen to the replay of the analyst conference call with Grossman when we get a minute to breathe from our day job.