Evine Live Inc. saw its net sales rise 3 percent year over year, to $161.1 million in the second quarter, the company reported Wednesday.
Those results compared to the 4 percent jump, to $1.4 billion, in the second quarter that QVC posted; and HSN’s net sales increased 3 percent, to $572.3 million.
Beauty was the fastest-growing product category at 23 percent, fashion and accessories delivered strong growth of 17 percent and jewelry and watches grew by 1 percent; gains were partially offset by declines of 12 percent in home and consumer electronics.
Online net sales as a percentage of total net sales increased 240 basis points to 46 percent.
Mobile remains the fastest-growing platform with net sales of $31.3 million, a 41 percent increase year-over-year.
Average-purchase frequency rose to 4.5 units per customer, a 10 percent increase.
Adjusted EBITDA was $2.5 million.
“We are pleased with our second-quarter financial results during this transition year, which were driven by better-than-expected sales. Over the quarter, we executed a more balanced approach to our airtime mix with continued investment in our new emerging brands, coupled with an ongoing commitment to our established anchor brands. Our top-line growth was driven by strong performance in the categories of beauty and fashion and accessories,” CEO Mark Bozek said in a canned statement.
“As we addressed a number of the challenges we faced in the first quarter, we are seeing momentum in our continued efforts to reposition Evine Live by introducing more merchandising variety with new emerging brands that are generating revenue across our multiple platforms, especially mobile,” Bozek said. “With key members of our senior leadership team now in place, we are confident that we have the ability to execute our strategic plan and initiatives to create long-term value for our shareholders.”
Gross profit decreased 2.6 percent to $58.9 million. Gross profit as a percentage of sales decreased 210 basis points to 36.5 percent, primarily related to the following decreases:
* 190 basis points of gross margin percentage decrease was attributable to reduced margins in Jewelry & Watches and Home (excluding textiles) due to merchandising mix changes and a lower than optimal average selling price (ASP).
* 30 basis points of gross margin percentage decrease was attributable to continued discounting of excess textile inventory.
* 25 basis points of gross margin percentage decrease was attributable to reduced shipping and handling margin.
Adjusted EBITDA decreased 54 percent to $2.5 million primarily due to continued gross margin pressure from merchandising mix changes and increased variable costs from lower than optimal blended ASP in jewelry and watches, home, and the continued discounting in textiles.
Operating loss was $2.2 million versus $3.7 million in the second quarter of last year.
“We are committed to delivering measurable transparency to the market as we execute our plan to drive sustainable shareholder value,” added Tim Peterman, Chief Financial Officer.
“We are focused on strengthening our balance sheet. We are upgrading our technology and customer care systems at our distribution center in Bowling Green and are currently on track to phase in our new warehouse management system through the first quarter of 2016. Most importantly, we are focused on improving our alignment between merchandising, average selling price, margin and inventory, while carefully evaluating our operating costs.”