HSN racked up net sales of $526.2 million in the second quarter, up 5 percent from the prior-year, the home shopping network said Thursday.
The No. 2 home shopping channel saw sales rise in home design, household, electronics, apparel and accessories, offset by lower sales in jewelry (Oh no!) and culinary. Net sales were also favorably affected by lower return rates.
“Our strong financial performance during the second quarter is a result of the uniqueness of our customer experiences, the power of our digital platforms and the quality of our brands and products,” HSN Inc. CEO Mindy Grossman said in a canned statement.
“Sales for the quarter were up 6 percent, digital sales increased 10 percent and EPS (earnings per share) rose 30 percent,” said Grossman, speaking about both HSN and Cornerstone, which comprise HSN Inc. “In addition, we continued returning value to shareholders through our share repurchase and cash dividend programs.”
Digital sales for the home shopping network rose 10 percent, with penetration increasing 160 basis points to 35.4 percent. The average price point decreased 4 percent while units shipped increased 7 percent primarily due to an increase in clearance activity.
Gross profit increased 3 percent to $187.5 million. Gross margin decreased 60 basis points to 35.6 percent, primarily due to an increase in shipping and handling promotions.
Operating expenses (excluding non-cash charges) increased 1 percent to $130.3 million. Adjusted EBITDA increased 8 percent to $57.1 million compared to $52.7 million in the prior year. Operating income increased percent 8 percent to $47 million compared to $43.3 million in the prior year.
Sales for HSN Inc., which includes the HSN network and the Cornerstone unit, increased 6 percent over the prior year to $812.6 million. While HSN’s net sales increased 5 percent to $526.2 million, including 10 percent growth in digital sales. Cornerstone’s net sales increased 8 percent to $286.4 million, including 10 percent growth in digital sales.