QVC Sales Up Slim Two Percent, Outlook Gloomy

The major domestic home shopping networks are having a tough year.

Liberty Interactive Corp., QVC’s parent, reported its second-quarter earnings on Friday. QVC did better than HSN, but gloomy honchos at the West Chester-based channel warned that sales really slowed down at the end of the quarter, echoing the challenges that brick-and-mortar retailers are facing.

“QVC continues forward in a choppy retail environment,” said Greg Maffei, Liberty Interactive president and CEO.

QVC’s U.S. revenue rose 2 percent to $1.4 billion in the second quarter versus the prior year. HSN, which reported its earnings on Thursday, saw its net sales for the quarter drop 3 percent, to $557.2 million.

“Beginning in early June QVC’s U.S. sales began to experience significant headwinds, which have continued,” Liberty said in its press release.

“The sales declines, as compared to prior periods, have averaged in the mid- to high- single-digit percentages. QVC has developed many initiatives intended to reverse the negative trends and QVC is optimistic, although there is no guarantee, that these actions will have a positive effect. However, even if these initiatives begin to reverse these trends, it is believed that QVC’s U.S. net revenue and adjusted OIBDA will likely experience negative growth rates for the third quarter.”

In other words, QVC’s sales will likely be down in the 3Q. QVC President and CEO Mike George had the same bad news.

“We reported solid second-quarter results, with good sales growth in most markets,” he said.

“Late in the quarter, we experienced a deceleration in demand in the U.S. that has continued. As a result, our near-term perspective is more cautious. Longer term, we remain well-positioned with our highly differentiated retail model, strong customer retention, and our ability to deliver compelling experiences across immersive commerce platforms.”

In the second quarter, QVC units sold increased 4 percent, average selling price per unit (“ASP”) decreased 3 percent to $56.60 and returns as a percentage of gross product revenue improved 82 basis points.

QVC saw growth primarily in the apparel and accessories categories, which was partially offset by declines in jewelry and electronics.

E-commerce revenue increased 11 percent to $727 million and grew more than 400 basis points to 51 percent of total U.S. revenue.

QVC’s international revenue increased 7 percent to $635 million in the second quarter.

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12 Responses to “QVC Sales Up Slim Two Percent, Outlook Gloomy”

  1. Lovie Says:

    They’re still #1. They’ll make the difference up at Christmas.

    • SUSAN Says:

      Really LOVIE—with the millioneth showing of THE FLASH PAD or how about Poo-Pourri, another bed or mattress or throw perhaps???????? They’ve been showing the SAME Christmas gifts for the last 3 or 4 years now—do your gift recipients want or need THE SAME STUFF!???????????? I bet your one of the host’s best friend’s on Facebook!

  2. Mammaberti Says:

    Not if Hillary elected and raises taxes like she says she is. no money left to shop!

  3. Dara Says:

    Mikey who’s going to get the blame Doug, Mary.. certainly not you. Cowards never admit they are the issue. So continue driving your fancy cars, collect your awards, spew you BS value speak. For us customers I will say it again Don’t buy from QVC. They have no values ship jobs overseas and as the old expression goes what goes around comes around… these sales are not coming back. Add that to your Resume Mike you are a horrible CEO and person.

  4. Shirley King Says:

    losing because items prices are getting sky high, Ervin’s is a lot lower, a t shirt around 50 , 60 dollars time you pay shipping and taxes, I hardly buy from hsn and qvc anymore

  5. Dara Says:

    When you had YEARS to respond to Amazon’s threat and refused to respond maybe it is your fault Mikey. Zuilly, please, a complete waste of money. And who pays the price, not you, just the rank and file who lose their jobs and suffer… how do you sleep at night?

    “Shares of QVC (Liberty Interactive), the West Chester-based mobile-, TV- and online-shopping service, bounced back 5% in trading today, after falling nearly 20% to $21.61, a three-year low, on Friday when the company acknowledged a mysterious summer drop in women’s clothing sales, plus higher customer-loan losses.

    QVC’s drop comes as online shopping giant boosts clothing sales and video marketing to working-aged women, QVC’s main customers. Revenues were up just 2 percent, disappointing investors (though Seattle-based mobile-sales specializt Zulily noted slaes were up 23% and margins rose to 8% from last year’s 5%.) “We did experience a deceleration in (U.S.) demand” late in the quarter, CEO Michael George told stock analysts in his quartelry conference call.

    Sales “haven’t turned so rapidly south on anyone else that I can point to,” FBR Capital Markets analyst Barton Crockett said during the call.

    “The biggest drop was clearly in fashion, which had been the thing that was propelling our business,” said CEO George. The company prides itself on steady sales gains. But George compared the recent dip to the 2008-09 recession. “The sales shortfall is with our best customers,” heavy users who can make dozens of QVC purchases a month, he added. The drop “has persisted through July and early August.”

    “What makes you confident that this isn’t just… Amazon getting success in fashion, and taking ma
    rket share not just from department stores but maybe from QVC?” Crockett persisted.

    George says QVC customers have told his surveyors they aren’t going to Amazon, at least not for stuff QVC also sells in large quantities. They tell QVC that “we shop (at Amazon) for our pet food, cleaning supplies and so forth,” but not much for clothing or home goods. He said the company expects sales will recover later this year.

    Despite flat U.S. results overall, QVC sales of key brands including Logo, Isaac Mizrahi, Susan Graver and Denim & Co. have been higher this summer. Home-security, fitness and garden sales were also strong. Sales were weaker in jewelry and consumer electronics, but that’s been a longer-term trend at QVC. Kitchen-equipment sales have also slipped.

    QVC reported strong sales of Amazon Echo, the voice-activated speaker system. The company moved 50,000 units of the system, which typically retails for over $120. “We were able to effectively explain this new technology to our customer, and offer her a better price,” George said.

    Costs increased with the opening of a West Coast warehouse; QVC’s first digital-only channel (BeautyiQ); and a new online video content stream at Facebook, along with “higher write-offs” from QVC’s Easy Play installment plan, which has been scaled back to cut losses.

    QVC’s venture capital arm profited by selling its stake in CommerceHub, and expects to sell its Expedia sales soon. The company spent $146 million in the quarter buying back its own shares to prop up the stock price.

  6. Dara Says:

    Hey Mikey, Department stores seem to be putting in some impressive results this quarter especially in June and July. Some of these company stocks up 50% this year. Could it be your lack of vision or talent? Nah…. keep cutting the innocent, you’re a gem.

  7. sally Says:

    What’s the difference between a slug like Mike George and a person like Katie Couric, try humanity and integrity… Don’t buy from QVC…

  8. Dara Says:

    Laying off another 100 poor employees today. Oh, Mikey you are running out of people to blame and let go. Could it be your poor management, no…keep on collecting those millions before they come and get you …. QVC has no values don’t buy from them.

  9. Dara Says:

    Stock tanking Mikey, guess you get rid of your chief buyer or other EVP but I have a feeling Liberty might just see through your this time… bye bye Mikey….hope you meet some of those poor souls who lives you ruined on the streets …

  10. SUSAN Says:

    The problem is that they’ve limited their programming and vendors to the same 15 products that are shown over and over and over again particularly on the weekends!!! How many vacuums (Shark & Dyson), mattresses, beds, computers, IT Cosmetics, and hair care tools does one need!!! They change the show titles but it’s the same ole thing. They sell mostly products you can buy in local stores and if you get them locally you don’t have to pay shipping!

    And if they think they through the customers a bone by adding a couple of new vendors. However, if they think that Stella
    & Dot (what I call OVERPRICED tupperware jewelry), Puma (cant have too many athletic shoes—they already have Ryka, Sketchers, Vionic, and even Clark doing this—so let’s bring in more—REALLY???) And QVC better start doing some REAL comparison shopping for clothing, instead of comparing their prices to BOUTIQUES (which the host and vendor always seem to do)…QVC’s clothing is overpriced, and then there’s their $10 “try me fee” (if returned if you have to eat your original shipping and pay $6.95 for your return label which adds up to $10). Their clothing sizes are inconsistent even in the same line, their quality has decreased, and prices TOO HIGH! The hosts seem OBSESSED with COLORS but give little else in product info…….AND THEY WONDER WHY THEIR SALES ARE DECLINING!!! They need to read the Forums instead of their Facebook BFF’s!!!

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