HSN Posts 10 Percent Sales Jump In First Quarter, To $600 million

It looks like HSN enjoyed a good first quarter, with net sales rising 10 percent to $600.5 million, the home shopping network reported Wednesday.

But, dang it, there was sales growth in all divisions except our favorite category, jewelry. Hope that doesn’t mean that HSN will start limiting its offerings of shiny baubles!

The results include sales associated with a direct-response television marketing campaign that started during the fourth quarter and contributed to 2 percent of this growth. We don’t know anything about this direct-response campaign.

HSN’s digital sales increased 18 percent with penetration increasing 280 basis points to 40.7 percent. The return rate improved 60 basis points to 17.7 percent, mostly due to changes in product mix. Units shipped increased 8 percent and average price point increased 2 percent.

Gross profit increased 9 percent to $207.5 million. Gross margin decreased 40 basis points to 34.6 percent primarily due to an increase in inventory reserves.

Operating expense leverage (excluding non-cash charges) improved 60 basis points to 23.5 percent.

HSN Inc.’s net sales, which include the shopping channel and the Cornerstone unit, were up 8 percent over the prior year to $841.9 million. Cornerstone’s net sales increased 4 percent to $241.4 million, including 5 percent growth in digital sales.

HSNi’s adjusted EBITDA increased 22 percent to $73.2 million, while its adjusted EBITDA increased 12 percent to $66.2 million. Cornerstone’s adjusted EBITDA increased $6.3 million to $7 million primarily due to strong performance at Garnet Hill. HSNi’s operating income increased 36 percent to $57 million.

Adjusted earnings per share increased 26 percent to 63 cents compared to 50 cents in the prior year.

“Our performance in the quarter reinforces the experiential power of our content and our ability to create engagement across our platforms,” HSN Inc. CEO Mindy Grossman said.

“HSNi had net sales growth of 8 percent and Adjusted EBITDA growth of 22 percent,” she said. “These results demonstrate the continued execution of our strategy to drive commerce by creating personal connections with our customers and offering unique and compelling products. Once again, accelerated performance in digital was a key factor in our strong growth momentum with digital up 12 percent, representing half of our total business. Mobile sales grew 31 percent for the quarter, with penetration at 18 percent of total sales.”

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One Response to “HSN Posts 10 Percent Sales Jump In First Quarter, To $600 million”

  1. carla Says:

    I love your blogs, and the interesting info you provide. I also learn from reading the various replies. Hopefully people who read mine will understand and identify with how I feel….
    I know time moves on and all things change with that, but I want my HSN, from 1999-2000, back! I’ve totally lost interest, and honestly, only a few vendors still have quality merchandise. Andrew Lessman, Nicky Butler, Jay King, RJ Graziano, Antthony, Wolfgang Puck, Perlier…to name most. I have quit buying from HSN…. my last purchase was in 2009 or 2010.
    I’m disappointed at the quality of some of the items…especially at the price points. Also, many of their long time vendors have SUBSTANTIALLY reduced the quality of their items; the above mentioned are most of the exceptions. HSN used to be a great place to try new products, and purchase useful items you couldn’t find elsewhere. Now they have many of the same things you can find in department stores, big barn stores, or even online/catalogs. And many times they come in “kits”…with some items you don’t want/need.
    The economy of this country has changed dramatically in the last 7-8 years. People mostly aren’t earning as much, and have to be much more careful of their spending. That is, with the few exceptions on the hosts’ facebooks that buy every piece of jewelry or every beauty kit. It has turned into a mindless cult following, instead of a convenient, budget friendly place to shop. Not all of us want high end fashion designer apparel. If we do, we can go to Macy’s, Dillard’s, Saks, or Bloomies. What happened to good house brands like Cervelle and Atlantic Beach? I bought, on sale, items from those 2 brands on hsn, enough clothing to base a spring/summer wardrobe on…for about $150. I realize things have gone up, but there is no equivalent anymore. And what happened to the silks/cottons Diane Gilman used to bring in. Yes,keep her jeans, but the other stuff was such a HUGE wardrobe builder. I bought 4 pieces that went together…a lightweight jacket, skirt, top and pants. Dressy-ish…but dress down too. I paid about $120 for all of it…and wore it for YEARS. It was season spanning, attractive,well fitted, and completely versatile. Where have those things gone?
    I might ask Mindy Grossman…who has more bad ideas than good in that she has let some great hosts go, and kept a few not so great. And most of the viewers who have spending power ARE NOT under 40 years old. I’m disappointed that many of the things offered look like they’re made for the Snooki genre. Nothing against her personally, but not that many people are young enough or want to dress in that style.
    I know this post will not change anything, but thank you for letting me rant. Maybe if enough people will back me up, we can have the HSN back we all knew and loved.

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