HSN’s First-Quarter Sales Dip 4 Percent To $578.4 Million

It looks like HSN had a tough first quarter. But it’s bringing a new jewelry exec, a QVC alum, on board.

The No. 2 home shopping network reported on Wednesday that its first-quarter net sales were $578.4 million, down 4 percent from the year-ago period. Operating income decreased 10 percent to $49.6 million.

Sales in electronics, wellness and culinary rose, offset by decreases in other categories. About half of the decline in net sales was attributable to the conclusion of a direct-response television marketing campaign during the current quarter.

“We deliberately wound down our Keith Urban infomercial in the first quarter, an area we always viewed as opportunistic, and this impacted our sales decline by 2 percent,” CFO Judy Schmeling said during a call with Wall Street analysts, according to a transcript from Seeking Alpha.


“Our performance in the quarter reflected the impact of the volatile retail environment combined with the repositioning of our product portfolio,” HSN CEO Mindy Grossman said in a canned statement.

“We continue to invest strategically in digital, data analytics and content while aggressively managing overall expenses in the business. Restoring top-line growth remains our top priority as we make progress in re-energizing certain merchandising categories and brands that we believe will build momentum at HSNi as the year progresses.

“Digital — now representing over half our sales — remains a key area of strategic focus and we continue to pursue opportunities to optimize our distributed commerce platforms,” Grossman said. “We are confident that as we accelerate our differentiated product pipeline, expand our content and reach and leverage new partnerships and platforms, we will be well positioned for long-term sustainable growth.”

Digital sales increased 4 percent, with penetration increasing 310 basis points to 43.8 percent. The return rate improved 90 basis points to 16.8 percent and average price point decreased 5 percent, primarily due to changes in product mix.

Grossman had some good news for us bling hounds, according to Seeking Alpha.

“Jewelry was down in the quarter but driven by a reduction in airtime as we continue to refine our assortment,” she said.

“We are having success in fine jewelry, particularly in gold, diamonds, and pearls as well as in our elevated fashion collection. I’m pleased to say that given the progress we have made against our new strategy, over the course of the year, we will be reinvesting in airtime against these key businesses including the successful relaunch of our fine jewelry experience on-air just last month in our 24-hour fine jewelry event.

Grossman added, “In addition, we are extremely excited that veteran jewelry industry executive, Catherine Coquillard, joins the team as Senior Vice President of Jewelry at the end of the first quarter. Catherine brings more than 20 years of leadership positions within jewelry including Helzberg Diamonds and QVC. We look forward to her meaningful contributions to the business.”

Gross profit decreased 4 percent to $199.3 million. The gross profit rate decreased 10 basis points to 34.5 percent primarily due to an increase in shipping promotions and changes in product mix, offset by lower procurement costs.

Operating expenses (excluding non-cash charges) decreased 2 percent to $138.6 million, which included lower costs for direct-response television marketing.

Adjusted EBITDA decreased 8 percent to $60.7 million.

Net sales for HSN Inc., which include the home shopping network and the Cornerstone catalog unit, decreased 3 percent to $816.8 million.

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2 Responses to “HSN’s First-Quarter Sales Dip 4 Percent To $578.4 Million”

  1. Jody Says:

    Bring back the old hsn- pre Mindy Grossman.
    Want to improve sales?
    Quit selling junky merchandise. Get rid of flimsy jewelry and poorly made clothes. Especially Colleen’s stuff. I haven’t kept one of the things I’ve bought from her fashion or jewelry lines. Broken stones, flimsy metal, missing stones. Clothes that shed and pill, don’t fit right, no uniform sizing. Then I get in trouble for sending it back…..
    Return shipping should be free, for defective items at least.
    Get some friendly, knowledgeable customer service reps, like you had in the early 2000s. Now when you call, there is someone at the other end of the phone with a bad attitude who doesn’t know anything.
    Take the red bull away from your hosts. Some need to calm down. And please take Colleen off the pedestal. Her head is 5 sizes too big, and her phoniness and fake enthusiasm are sickening. Watch what she posts on her social media, too. She’s a product pusher and even uses her dogs as product whores.
    Having said that, you fire good hosts like Rachel Huber and keep the phonies. Get rid of some of these people.
    What happened to the simple sets? Now we have busy living rooms, confusing stages to watch. The simple sets from late 90s- 2000 kept the focus on the products. You’re coming into MY living room; I’m not going into yours. Make a note here, too, QVC.
    Too many scattered one off brands, too many promotional confusing themes. We could have done nicely without all the hoopla from Through the Looking Glass. Just sell the associated products, like you did for Kung Fu Panda 3.
    Too many celebrity lines. Cool it with the Hollywood/celeb stuff.
    Prices. Lower them a bit. Most items are way over priced. And, what happened to shows like beat the clock jewelry, and beat the clock fashion? Your markdowns now do not come close to clearance prices. You used to have great values and pricing. Wake up; you are not Saks or Bloomingdales….you are an electronic retailer. Get off your high horse. The only rich people buying from you are the ones with heavy wallets and light brains. The crap you sell can be found better and cheaper elsewhere online as well as brick and mortar.
    Just my opinion, but I have a feeling I’m not the only one with it.

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