HSN Sales Rise 4 Percent In The Second Quarter

HSN’s sales increased 4 percent in the second quarter, to $501.9 million, versus the year-ago period, the home shopping network said Wednesday.

Sales increased primarily in home design, beauty and fashion, offset by a sales decline in electronics, HSN said in a press release. The average price point decreased 5 percent and the units shipped increased 10 percent primarily, due to changes in product mix. The return rate increased 50 basis points, to 19.9 percent from 19.4 percent.

Digital sales rose 8 percent, with penetration increasing 120 basis points to 33.8 percent.

Gross profit increased 5 percent to $181.7 million. Gross profit margin improved 20 basis points to 36.2 percent from 36 percent. The margin was positively impacted by the product mix shift and lower transaction costs, partially offset by an increase in shipping and handling promotions.

Adjusted EBITDA increased 2 percent to $52.7 million compared to $51.6 million in the prior year. The increase was due to the 4 percent growth in net sales, offset by an increase in operating expenses primarily from employee-related costs, digital marketing and technology investments. Operating income increased 6 percent to $43.3 million compared to $40.8 million in the prior year.

HSN Inc., which includes the home shopping channel and Cornerstone, saw its net sales increase 6 percent in the second quarter, to $767.2 million. Cornerstone acquired Chasing Fireflies and divested Smith+Noble and The Territory Ahead.

“This quarter, we made excellent progress in building our interactive, content-driven, direct to consumer portfolio of aspirational lifestyle brands,” HSN CEO Mindy Grossman said in a canned statement.

“Our consistent execution enabled us to achieve sales growth of 6 percent, digital sales growth of 12 percent, and customer file growth across the portfolio,” she said. “We completed the acquisition of Chasing Fireflies and the divestitures of Smith+Noble and The Territory Ahead as we reposition the Cornerstone portfolio for the future. We also continued to drive shareholder value by doubling the pace of our share repurchase program from Q1 and declaring another cash dividend.”

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