HSN’s net sales rose 6 percent, to $556.5 million, in the second quarter compared to the prior-year period, the No. 2 home shopping network reported Thursday.
That growth outpaced industry leader QVC, which earlier in the week posted a 3 percent jump in revenue in the second quarter, to $1.4 billion.
At HSN in the quarter, digital sales were up 11 percent, with penetration increasing 180 basis points to 37.2 percent.
Sales grew in beauty, home design, health and culinary, offset by lower sales in electronics and jewelry. Units shipped increased 4 percent and the average price point increased 2 percent.
Gross profit increased 5 percent to $196.5 million, with gross margin decreasing 30 basis points to 35.3 percent primarily due to an increase in shipping promotions. Operating expense leverage (excluding non-cash charges) improved 80 basis points to 24 percent.
Adjusted EBITDA increased 10 percent to $62.7 million. GAAP operating income increased 11 percent to $52.1 million.
Consolidated sales for HSN Inc., which includes the home shopping network and the company’s Cornerstone unit, were $855.2 million, a 5 percent increase.
“Our focus during the second quarter remained on engaging our customers, emphasizing our unique content and proprietary products, and strengthening our digital platforms,” HSN CEO Mindy Grossman said in a canned statement.
“HSNi sales increased 5 percent and digital sales grew 9 percent with mobile now representing 15 percent of our total sales. During the quarter, we saw a bifurcation within our business,” she said.
“HSN had strong results with sales up 6 percent, digital sales up 11 percent and Adjusted EBITDA up 10 poercent. While Cornerstone maintained top line growth of 4 percent, margins were impacted by a highly promotional marketplace,” Grossman said.
“Our customer file metrics at both HSN and within the Cornerstone portfolio were at record highs,” she said. “We also returned $63 million to our shareholders through our capital return plan.”