HSN saw a pretty good third quarter, with its net sales rising 7 percent to $578.3 million, the home shopping network reported Tuesday.
HSN attributed its performance to strong sales growth in apparel & accessories, home design, health and electronics, partially offset by a decline in jewelry. Yikes, our favorite category!
Digital sales grew 13 percent, with penetration increasing 200 basis points to 38.8 percent. The return rate decreased 120 basis points to 17.6 percent, primarily due to changes in product mix.
Units shipped increased 3 percent and average price point increased 4 percent.
Gross profit increased 9 percent to $202.7 million. Gross margin increased 50 basis points to 35.1 percent primarily due to lower clearance sales and higher product margins, partially offset by an increase in net shipping expense.
Operating expense leverage (excluding non-cash charges) improved 50 basis points to 23.5 percent.
Adjusted EBITDA increased 17 percent to $66.7 million. Operating income increased 18 percent to $56.2 million.
HSN Inc., which includes HSN and Cornerstone, had a 5 percent increase in net sales, to $837.5 million.
“HSNi’s strong performance in the quarter was a direct result of the successful execution of our strategic initiatives,” CEO Mindy Grossman said in a canned statement.
“HSN’s unrelenting focus on customer acquisition and assimilation, digital optimization, and the strength of our product portfolio drove overall sales growth of 7 percent and digital sales growth of 13 percent,” she said.
“We also had sequential financial improvement at Cornerstone,” Grossman said.