ValueVision Media, aka ShopNBC, posted a whopping 15 percent increases in its first-quarter net sales, to $143.5 million from $125 million, the home shopping network reported Wednesday.
That’s the good news. The bad news was that unless our eyes are deceiving us, ShopNBC’s net loss in the quarter was $28.9 million, more than double the loss in the year-ago period. But the operating loss was only $630,000, versus $9.1 million a year ago.
ShopNBC also reported that: Adjusted EBITDA increased by $7.4 million to $3.1 million; gross margin rose to 37.2 percent versus 36.6 percent in the year-ago quarter; and Internet-sales penetration increased to 44.9 percent.
“ValueVision started fiscal 2011 with another quarter of solid progress across our multichannel business, led by strong sales and margin growth and our third consecutive quarter of positive adjusted EBITDA,” ShopNBC CEO Keith Stewart said in a canned statement. “In addition to strong merchandising and operational execution, we also strengthened our capital structure and enhanced our financial flexibility through the early redemption of our 12 percent preferred stock with proceeds from the sale of 9.5 million common shares.”
Apparently not knowing when to stop when he’s ahead, Stewart added, “We also continued to build our talent pool across key areas of the company, adding four proven interactive retail veterans to our team. Annette Repasch, a multichannel retailing executive of 25 years, joined us to oversee merchandising strategy and product development for Jewelry & Watches, Health & Beauty, and Fashion & Accessories. We also added three industry veteran
strategic advisors to focus on major IT, process engineering, merchandising and customer service initiatives. The ShopNBC team is key to our future, and we are executing on an exciting road map to drive improved performance.
“Plans for the remainder of this year are centered around an impressive line-up of new product, top brands, and compelling
promotions to drive new and active customer growth. We will also be focused on further increasing our Internet sales penetration toward 50 percent as well as refinancing our long-term debt with lower interest rates.”
The first-quarter net sales reflected strong performances across the Jewelry & Watches and Home & Electronics categories, in addition to solid momentum in the Health & Beauty segment. Fashion &
Accessories is still early in its repositioning, though it achieved some well-received first-quarter brand launches, according to ShopNBC.
Strong customer response to higher-priced items, including big-screen TVs, mattresses and certain jewelry offerings contributed to a slight uptick in average selling price in the quarter, as well as a more modest increase in units shipped and an expected increase in return rates.
ShopNBC president Bob Ayd chimed in.
“Q1 saw a continuation of the trends that drove strong Q4 results and provide our business with a more balanced and resilient platform,” he said. “In addition, we had more merchandise variety across key product categories and saw benefits from several national brand introductions, including Simmons mattresses, Sur La Table kitchenware, and Anne Klein fashion accessories. This ever-expanding array of quality products and unique offers helped drive customer activity and sales gains in Q1.”
“Looking ahead in 2011, we can’t help but be optimistic. We have a more established and robust business, strong senior leadership, a growing base of popular products and brands, a healthy balance sheet, and a growing track record of success. All of these factors are proving beneficial in our efforts to both delight our customers as well as to attract exciting new vendors and product exclusives.”