HSN’s net sales increased 3 percent, to $572.3 million in the second quarter, with strong growth in apparel, accessories and electronics offset by decreases in jewelry (Oh no!) and home, the shopping network reported Thursday.
The No. 2 home shopping channel hit Wall Street’s projections for earning per share, but not the forecasts for net revenue, according to the Associated Press.
That compares to the 4 percent jump, to $1.4 billion, in the second quarter that QVC posted on Wednesday.
HSN’s digital sales were up 11 percent with penetration increasing 310 basis points to 40.3 percent. The return rate improved 70 basis points to 18 percent primarily due to changes in product mix. Units shipped increased 2 percent and average price point increased 1 percent.
Gross profit increased 7 percent to $209.3 million. Gross margin increased 130 basis points to 36.6 percent primarily due to favorable vendor settlements and lower inventory-related costs including inbound freight and duties.
HSN recorded $3 million for certain costs associated with the planned closure of one of its distribution centers as part of its supply-chain optimization initiative.
Excluding non-cash charges and the costs associated with the planned closure of the distribution center, operating expenses as a percentage of net sales increased 70 basis points to 24.7 percent primarily due to increases in bad debt expense and employee-related costs.
Adjusted EBITDA increased 9 percent to $68.2 million. Operating income increased 3 percent to $53.5 million.
The consolidated results for HSN Inc., which includes the HSN network and the Cornerstone unit, were that net sales rose 4 percent over the prior year to $885.6 million.
“Our ongoing focus on content-driven commerce continues to position us well for long-term growth,” HSN Inc. CEO Mindy Grossman said in a canned statement. “HSNi’s results in the quarter reflected strong top and bottom line performance, particularly on our digital and mobile platforms. We continue to advance our strategies to remain a leader in boundaryless retail.”