This may not be good news for ShopHQ’s dissident shareholders: The No. 3 home shopping network had a pretty good first quarter.
ShopHQ’s net sales in the first quarter rose 6 percent to $160 million, boosted by strong customer demand in fashion, accessories and beauty, health & fitness.
That compares to the 1 percent increase that QVC saw, to $1.3 billion, and the 1 percent dip that HSN experienced, to $544.5 million.
You can see ShopHQ’s slide show for Wall Street analysts on this link:
Gross profit dollars increased 5 percent to $60 million in the quarter, while gross profit as a percent of sales remained strong at 37.6 percent, compared to 37.7 percent in the year-ago period.
ShopHQ’s adjusted EBITDA was $6 million, flat compared to a year ago, as the company’s sales and gross profit improvements were offset by investments in channel positioning within TV distribution costs.
In addition, net shipped unit volume increased 28 percent over the same quarter last year, resulting in higher variable costs to support this growth.
ShopHQ’s first-quarter adjusted net income was $2 million, or three cents a share. That compares to the year-ago period’s adjusted net income of $1 million, or two cents a share.
In its press release, the network said that its strategic focus on building its ShopHQ customer base yielded solid gains, as total customers purchasing over the last 12 months rose 22 percent to a record 1.4 million.
Customer growth was driven by the company’s ongoing focus of broadening its merchandise offerings as well as strategically lowering its average price point, which decreased to $76 in the quarter compared to $93 in the same quarter last year, according to the release.
These changes support continued customer growth and increased purchase frequency, which rose 9 percent in the quarter over the same period last year, the statement said.
“We are pleased with our Q1 results, which marked the 8th consecutive quarter of sales growth and positive adjusted EBITDA,” ShopHQ CEO Keith Stewart said in a canned statement.
“We continue to make progress in growing revenue and gross profit while repositioning our product assortment,” he said. “Our success in achieving increased customer growth and a lower average price point at strong margins accelerated throughout Q1 and should provide us with positive momentum for the second quarter.”
Stewart’s lieutenant also had a few words.
“Our balance sheet condition remains strong,” EVP & CFO William McGrath said.
“We ended the first quarter with $27 million in cash and restricted cash compared to $31 million at the beginning of the year. Net use of cash includes $5 million in working capital and $3 million in capital expenditures partially offset by the Company’s positive adjusted EBITDA results in the quarter. In February, we increased our PNC credit facility from $50 million to $75 million. This $25 million increase will facilitate the 2014 expansion of our warehouse distribution facility to support anticipated growth.”