Posts Tagged ‘fourth quarter earnings’

ShopHQ Sees 4Q Sales Dive 22%, Lays Off 152 Employees

April 17, 2020

If you are a home shopping network, you don’t want to be ShopHQ. The company reported dismal fiscal-fourth quarter earnings this week, and dropped the ax on another raft of employees.

Revenue in the fourth quarter nosedived 22%, to $124 million, compared to the same year-ago period. What happened?

In a press release, ShopHQ said “half of this decline was expected and attributable to the company’s recent customer file decline.” We have no idea what that means.

There were also three one-time events that drove the dip, the network said.

They were:

* Scheduling conflicts in December with top two beauty brands,

* Reduction in consumer electronic products due to the largest CE vendors requiring “cash in advance” payment terms, and

* Reduction in watch revenue resulting from management’s strategy to reverse its five-plus year customer file decline by reducing the average selling price to capture more new customers.

The network also had an $18.4 million net loss in 4Q, versus a $10 million loss in that same quarter in the year-ago period.

In addition, one of our readers tipped us off that the Minneapolis Star Tribune reported that ShopHQ had laid off 152 employees. That story made reference to our blog, as a source for the exit of host Laura Duffek.

On the plus side, ShopHQ said it had completed its acquisition of J.W. Hulme, “an iconic, 114-year-old American brand offering artisan-crafted accessories and apparel via e-commerce, catalogs and one flagship retail store in St. Paul, Minnesota.”

Iconic? We’ve never heard of it.

ShopHQ got a $4 million private cash infusion led by Eyal Lalo, Invicta’s CEO and vice chairman of the network’s parent company, iMedia. The watch company Invict has a huge stake in ShopHQ, which is why every time you turn on the channel you see its timepieces being hawked.

What did CEO Tim Peterman have to say?

First and foremost, in terms of the COVID-19 situation and these uncertain and stressful times, iMedia continues to be focused on taking every necessary step to keep its employees, vendors, customers, guests, and their families safe.

We are also focused on continuing to provide our customers with the products and services they love, and we feel very fortunate our company remains operational and relevant so we can continue to build value for our shareholders.

In terms of Q4 performance, from a ShopHQ revenue perspective, it was a mixed report card. We achieved significant viewership, customer file, and product assortment successes, but we also absorbed revenue pressure from three unplanned events. With that being said, I’m proud of how our teams reacted to reduce the probability of re-occurrence.

Financially, our turnaround continues In our first nine months since May 2019 when I rejoined as CEO, we materially reduced the company’s adjusted EBTIDA loss compared to the prior nine months.

Strategically, Q4 is when we really began to demonstrate our plan to grow our portfolio of engaging niche television networks, niche national advertisers and complementary media services. We launched Bulldog and our membership service, ShopHQ VIP. We acquired two important new businesses that will further accelerate our evolution into a profitable, growing interactive media company.

If you say so, Tim.

Evine Explores Sale of The Home Shopping Network

March 28, 2019

Things are not looking very good for Evine, which Wednesday announced it was formally reviewing alternatives such as a sale of the network or entering a strategic partnership.

The Minnesota-based channel put out that sad news as it reported its dismal fiscal fourth-quarter earnings, with net sales of $157.6 million, down 12 percent versus the prior year-period.

The company also saw a net loss of $10 million, compared to net income of $6.4 million in the prior year.

The network did list some 2018 successes, such as: the launch of Jennifer Flavin-Stallone’s Serious Skincare; adding new brands and product lines such as Nutritionary, Ron White, Karl Lagerfeld, Nygard, Ready to Wear Beauty, among others; announcing a collaboration with the Jane Fonda; and attracting new brands with the launch of its new Los Angeles office and studio.

Then came the real lede.

“The company today announced that its board of directors initiated a process to review strategic alternatives to enhance shareholder value which could include a potential sale or strategic partnership,” Evine said in its press release.

It has retained Guggenheim Securities as its financial advisor.

Here’s what CEO Bob Rosenblatt had to say:

We had a strong first half of 2018 that saw both top-line and bottom-line growth. This followed two years of substantial progress, including stabilizing the business, improving the balance sheet and building a strong team and culture. That’s what makes the results over the last two quarters so disappointing.

We are confident in our strategy and committed to our plan, and we are focused on reversing the recent trends, which we believe to be short-term. Maximizing shareholder value remains our top priority.

Due to increased interest in our direct-to-consumer platform, as well as inquiries regarding our expertise in video commerce, product development and third-party logistics, we saw an opportunity to explore strategic options.

Video commerce is more relevant today than when we started on this journey three years ago. We believe that there is strong interest in our brand, in our access to over 87 million homes and in our proficiency in producing video and digital content that tells the story behind brands and products.

As we progress through this process, including reviewing a comprehensive list of ways to enhance shareholder value, we remain focused on growing our business, and are confident, that despite our recent financial trends, we are on the right path.

QVC Posts 3 Percent 2018 Sales Growth, HSN Down 6 Percent

February 28, 2019

QVC was up last year, and HSN was down.

That was the news Wednesday when the parent of the two home shopping networks, once rivals but now under the same ownership, reported fourth-quarter earnings.

Domestic QVC’s revenue rose 3 percent in both Q4, to $2.087 billion, and all of 2018, to $6.349 billion, according to Qurate Retail.

In comparison, No. 2 home shopping channel HSN’s revenue dropped 1 percent in Q4, to $707 million, and declined 6 percent last year, to $2.202 billion.

“In 2018, we made meaningful progress shaping the future of Qurate Retail, highlighted by the strongest new customer growth at QVC US in its 33-year history and continued gains in digital and mobile engagement,” Mike George, Qurate’s president and CEO, said in a statement.

“Results for the year were led by top-line growth at QVC US and International, excellent performance from zulily, and significantly improved second-half results at HSN as we execute on its turnaround,” George said. “Margin improvement is a top priority in 2019, as we step up the realization of integration synergies and seek to execute on initiatives to improve product margin and optimize our marketing investments.”

In the fourth quarter, QVC saw sales gains primarily in electronics, apparel and accessories, which were partially offset by declines mainly in home.

For the full year, QVC posted revenue increases mainly in accessories and apparel, which were partially offset by declines principally in jewelry.

In Q4, HSN suffered sales declines in electronics and jewelry, which were partially offset by gains primarily in accessories, beauty and apparel.

For the full year, HSN realized declines in all categories. Not good.

Here’s another inside tidbit: HSN is operating under several renewed carriage agreements with certain distribution partners beginning in the third quarter of 2018 which provide for capitalized upfront payments that are amortized over the life of the agreements, versus HSN’s previous convention of expensing the payment associated with the contract terms each quarter.

Evine’s Net Sales Flat in Fourth Quarter

March 15, 2018

Evine’s net sales in the fourth quarter last year were basically flat, up about 1 percent, to $192.7 million year over year, the home shopping network reported Wednesday.

The channel did see a great improvement over its net income, which skyrocketed 214 percent, albeit to just $6.4 million.

And the muckety-mucks at the No. 3 shopping channel felt they had a lot of ‘splaining to do.

Here’s CEO Bob Rosenblatt’s statement:

I’m pleased to report our fourth-quarter results demonstrate the continued progress we’re making in improving profitability and strengthening our financial position.

We reached many financial milestones in the fourth quarter and the fiscal year, including the highest fourth-quarter net income in the history of the company, the highest fourth quarter Adjusted EBITDA since 2010, and the first fiscal year of positive net income since 2007.

I’m proud of the many accomplishments we made this year and also realize that we have the opportunity for continued progress, especially on revenue growth, as we leverage our undervalued interactive digital commerce assets and expertise to scale our enterprise and continue to improve our profitability and free cash flow.

Our fourth-quarter sales growth of 1.2 percent was below our original estimates as we decided to focus on execution and profitability. As such, during the quarter we chose to minimize aggressive promotions and pulled back on marketing spend, that might have garnered higher revenues in the short term but would not have been additive to profitability or to our overall brand and company strategy.

We had many successes during the fourth quarter and fiscal year by broadening our merchandising assortment vis-a-vis brand launches and extensions. In addition to that, there still remains ample opportunity and ‘white space’ to continue to strengthen and add to all merchandise categories.

We have already made significant progress doing this during the fall 2017 season and this progress is already beginning to bear fruit in 2018. The most accretive component of this to our contribution margin is in our proprietary and exclusive brand product areas. To that end, the progress to continue to minimize friction throughout the customer experience across all platforms along with continuing to broaden our assortment in proprietary and exclusive brand product areas will be the two key focuses in fiscal 2018.

Strategically, 2018 is the third year of our turnaround plan. This year is about profitable revenue growth, product development and customer growth. Reestablishing profitability and strengthening the balance sheet these past two years has not been easy but I’m proud of the strong foundation we’ve built and believe it positions us well for profitable top line growth in 2018 and beyond.

In the fourth quarter the top-performing category was home and consumer electronics, which increased 10 percent year-over-year. The beauty category grew slightly year-over-year while fashion, jewelry and watches both decreased slightly year-over-year.

The return rate for the quarter was 19 percent, an increase of 60 basis points year-over-year.

For the full 2017, net income dropped about 3 percent, to $648.2 million.
The top category during the year was home and consumer electronics, which rose 3 percent year-over-year compared to a 22 percent decrease in 2016. Fashion and beauty had slight decreases and jewelry and watches were down 6 percent.
The return rate for the year was 19 percent, an improvement of 40 basis points year-over-year.

QVC Up, HSN Down In Fourth Quarter

March 2, 2018

Liberty Interactive Corp., which now owns both QVC and HSN, reported fourth-quarter earnings for both home shopping channels on Thursday. It was a mixed bag.

The domestic QVC network saw its revenue increase 4 percent, to $2.029 billion, in the quarter year over year. In contrast, it was a tough go for HSN, which experienced an 8 percent revenue drop, to $712 million from $771 million in the year-ago quarter.

Liberty Interactive also announced that it is rebranding its various retailing entities – QVC, HSN, zulily and Cornerstone Brands – from the name QVC Group to Qurate Retail Group Inc.

Liberty Interactive’s purchase of HSN led to $43 million in severance-related costs, which were incurred by HSN. We assume that relates to the exit of HSN’s top management, including former president Bill Brand. Perhaps those costs dragged down HSN’s numbers.

“QVC US and International posted excellent fourth quarter results, and we were pleased to complete the acquisition of HSN,” Liberty Interactive President and CEO Greg Maffei said in a canned statement.

“We anticipate closing the acquisition of GCI and the subsequent creation of two asset-backed stocks, Qurate and GCI Liberty, on March 9. With the separation, Mike George will become President and CEO of Qurate. Mike has done a fantastic job building QVC, delighting customers and driving value for shareholders over the last twelve years. We look forward to him leading this innovative set of companies.”

In the fourth quarter, QVC US saw year-over-year gains in all categories except jewelry, Liberty Interactive said in its press release.

“The operating income margin and adjusted OIBDA margin performance primarily reflects higher fixed costs associated with incentive compensation and HSNi integration consulting services, as well as higher inventory obsolescence and marketing expenses, which were partially offset by lower bad debt and amortization,” the release said.

”The adjusted OIBDA for the fourth quarter includes $7 million of integration costs and a $6 million increase in management bonuses.”

For 2017 versus 2016, QVC’s revenue was basically flat, $6.14 billion compared with $6.12 billion.

QVC enjoyed year-over-year gains in all categories except jewelry. The full year operating income margin and adjusted OIBDA margin performance primarily reflect lower bad debt expense, higher product margins and lower amortization, which were partially offset by higher incentive compensation and inventory obsolescence costs. Adjusted OIBDA in 2017 includes $9 million of HSN integration costs and a $26 million increase in management bonuses.

HSN revenue declined in all categories in the fourth quarter. The average selling price dropped, primarily driven by product mix shift away from electronics, which typically are higher-priced items. The return rate improved due to a continued positive trend in several categories.

Operating income and operating income margin declined, driven by the aforementioned transaction expenses. Adjusted OIBDA and adjusted OIBDA margin improved, largely due to about $16 million in incremental costs incurred in the prior year associated with the implementation of HSN’s warehouse automation initiative. Additionally, the increase in adjusted OIBDA margin was driven by higher product margins, lower selling and marketing costs and a decrease in personnel expenses.

For 2017 compared with 2016, HSN’s revenue dropped 5 percent, to $2.343 billion.

“HSN revenue declined in all categories except home for the full year 2017,” the press release said. “Average selling price declined, primarily driven by product mix shift away from electronics. The sales return rate improved due to a continued positive trend in several categories. The decrease in operating income margin and adjusted OIBDA margin() was due to increases in personnel costs, bad debt expense and lower shipping margins, partially offset by improved product margins and lower selling and marketing costs.”

Evine To Report Fourth-Quarter Results March 14

February 26, 2018

Evine will release its fourth quarter and 2017 results March 14 before the market opens at 6 a.m., the No. 3 home shopping network said last week.

CEO Bob Rosenblatt and Tim Peterman, chief operating officer and chief financial officer, and Michael Porter, vice president of finance and investor relations, will host a conference call later that morning at 8:30 a.m. to review the results.

Those interested in participating in the conference call should dial 1-877-407-9039 or 1-201-689-8470 (international) at least five minutes prior to the call.

There will be a simultaneous audio webcast available at

A replay of the conference call will be available on the company’s website for a limited time.

QVC Parent To Post 4Q Results March 1

February 9, 2018

Liberty Interactive Corp., QVC’s parent company, will announce its fourth-quarter earnings March 1.

Liberty President and CEO Greg Maffei will host a conference call to discuss the results at 11 a.m.

Following prepared remarks, the company will host a brief Q&A session during which management will accept questions regarding both Liberty Interactive and Liberty TripAdvisor Holdings.

During the call, Maffei may discuss the financial performance and outlook of both companies, as well as other forward looking matters including the proposed acquisition of General Communication Inc. by Liberty Interactive, its combination with Liberty Ventures Group and the subsequent split-off of Liberty Interactive’s interest in the combined company.

Please call ReadyTalk at (866) 548-4713 or (323) 794-2093, passcode 9151576, at least 10 minutes prior to the call.

In addition, the fourth-quarter earnings conference call will be broadcast live via the internet.

All interested participants should visit the Liberty website at to register for the webcast. Links to the press release and replays of the call will also be available on the Liberty website. The conference call will be archived on the website for one year after appropriate filings have been made with the SEC.

About Liberty Interac

Evine’s 4Q Sales Drop 10%, To $191 Million

March 23, 2017

Evine joined its two much larger rivals in posting declines in sales in the fourth quarter, seeing its revenue dive 10 percent, to $191 million, the No. 3 home shopping network said Wednesday.

Evine said its drop in net sales was “driven by a $21 million reduction in low contribution margin consumer electronics, which includes management’s proactive $15 million reduction of low margin hoverboard sales.”

“Excluding the effect of hoverboard sales, fourth-quarter net sales declined about 3 percent,” the home shopping network said in its press release.

The company posted net income of $2 million, a 207 percent improvement year-over-year, and adjusted EBITDA of $6.4 million, a 31 percent rise year-over-year.

For all of 2016, Evine registered revenue of $662.2 million, down nearly 4 percent.

Click to access Evine-Earnings-Investor-Presentation-F16-Q4.pdf

QVC and HSN didn’t have great quarters, either.

QVC’s fourth-quarter revenue dropped 7 percent, to $1.9 billion, and was down 2 percent in 2016 versus the prior year, to $6.1 billion. HSN saw its sales dip 1 percent in the fourth quarter, to $769.3 million, and slip 3 percent last year, to $2.7 billion.

Evine CEO Bob Rosenblatt had plenty to say.

“This is the fourth quarter in a row that we have expanded our gross margin rate, improved our cash position and grew our Adjusted EBITDA on a year-over-year basis,” he said in a canned statement.

“I’m very proud of our team and these results, particularly in light of the challenging macro retail environment. As previously noted, we continue to be on a different journey from our closest competitors. Our strategy to rebalance our merchandising mix and implement expense discipline has positioned us well for an exciting 2017.”

And that wasn’t all.

“Looking to 2017, we believe this will be another strong year of building shareholder value,” he said. “Our merchandising plan will remain focused on delivering a balanced assortment of profitable proprietary, exclusive and name brand products.  We will continue to work hard to engage our customers more intelligently by leveraging the use of predictive analytics and interactive marketing to drive personalization and relevancy to each experience.”

And even that wasn’t all.

“And equally important, we will continue to find new methods, territories and technologies to distribute our video commerce programming beyond the television screen,” he said.

“This will include growing our revenues in social, mobile, online, and over-the-top platforms like Amazon Firestick, Apple TV and Roku, and also exploring thoughtful bricks and mortar retailing partnerships that leverage our video commerce expertise to build a bridge between traditional retail and e-commerce.”

In the fourth quarter wearable categories, which include jewelry and watches, fashion and accessories, and beauty posted “solid revenue performance, and together grew by 2 percent,” according Evine.

“However, this growth was more than offset by a 55 percent decline in the consumer electronics category, of which more than two-thirds of the decline was related to not repeating the low-margin hoverboard sales from last year,” the network said in its press release.

In a call with Wall Street analysts, Rosenblatt gave a shout out to us jewelry hounds.

“We had several well executed jewelry events during the quarter, this included our Diamond Day event in November, which resulted in 18 percent improvement in productivity over the last year,” he said, according to a transcript from Seeking Alpha.

“In addition, we are able to be the first company to market the Burmese tuby which only recently became available to the U.S. market after 10 years. The customer responded when we experienced the 30 percent higher productivity versus our base jeweler business. In addition, we had a successful January Gem week as we continue to have success selling a wide variety of gem stones to our very loyal jewelry customers.”

Evine is also steaming  ahead with its conversion to HDTV.

“And as we have discussed our conversion to high definition TV is expected to be completed in launch by September,” Rosenblatt told analysts.

“We started the process of converting to high definition TV in the third quarter of fiscal 2016. We remained on track with this initiative. Phase I which included camera replacements and a transition to 16:9 aspect ratio which completed in the fourth quarter and Phase II which includes HD switcher replacements is set to be completed this spring. The final Phase will be completed by fall at which time we will be fully broadcasting in high definition. This transition to HD will improve our customer’s viewing experience which we believe will result in incremental sales.”



QVC’s 4Q Revenue Drops 7 Percent, To $1.9 Billion

March 1, 2017

The end of last year was tough going for home shopping networks.

On Tuesday QVC’s parent released fourth-quarter earnings, and the channel saw a dip in its sales, just like its rival HSN recently reported.

QVC’s U.S. revenue dropped 7 percent, to $1.9 billion in the fourth quarter and 2 percent, to $6.1 billion, in 2016, according to Liberty Interactive Corp.

“Internationally, QVC continues to perform well, while domestically we are focusing on strengthening a few merchandise categories that have been weak,” Liberty Interactive President and CEO Greg Maffei said in a canned statement.

HSN just had similar bad news to report. Its net sales dipped 1 percent, to $769.3 million, in the fourth quarter versus the prior year. In 2016, HSN’s sales were down 3 percent, to $2.5 billion.

QVC’s top honcho Mike George had a lot of ‘splaining to do. And he did.

“Our international segment generated strong results in the quarter with broad-based sales gains and margin expansion,” George said. “The sales trend in our U.S. business persisted from the third quarter primarily due to continued headwinds in select categories. We have strong action plans in place and are confident in our ability to return the US business to growth.”

“In 2016, we continued to significantly advance our digital platforms. eCommerce and mobile penetration grew approximately 260 and 800 basis points, respectively,” he said. “As we begin 2017, we are serving a large, engaged customer base, and we are creating competitive advantages as we further extend our reach across digital and next generation commerce platforms. We will leverage these strengths to build on our highly differentiated shopping experience.”

In the quarter, QVC’s average selling price per unit (“ASP”) decreased 8 percent to $56.78, units sold increased 1 percent, and returns as a percentage of gross product revenue improved 32 basis points. The U.S. experienced year-over-year declines in all categories except apparel.

For the year, ASP decreased 6 percent to $57, units sold increased 2 percent, and returns as a percentage of gross product revenue improved 104 basis points. Domestic QVC experienced year-over-year declines in jewelry, electronics and beauty, which were partially offset by gains in apparel, home and accessories.

E-commerce revenue decreased 1 percent to $1.1 billion and grew 326 basis points to 56 percent of total U.S. revenue in the quarter. For the year, e-commerce revenue increased 4 percent to $3.2 billion and rose 328 basis points to 52 percent of total U.S. revenue.

In the quarter, operating income decreased 15 percent to $303 million, operating income margin declined 143 basis points, adjusted OIBDA decreased 9 percent to $438 million and adjusted OIBDA margin declined 43 basis points, including the aforementioned cost allocations.

Excluding the cost allocations, adjusted OIBDA decreased 10 percent to $431 million and adjusted OIBDA margin declined about 80 basis points, primarily due to higher freight and warehouse expenses and lack of sales leverage.

For the year, operating income decreased 6 percent to $915 million, operating income margin declined 58 basis points, adjusted OIBDA decreased 2 percent to $1.4 billion and adjusted OIBDA margin was flat, including the aforementioned cost allocations.

Excluding the cost allocations, adjusted OIBDA decreased 4 percent to $1.4 billion and adjusted OIBDA margin decreased roughly 50 basis points, primarily due to lower product margins and higher bad debt, freight and warehouse expenses, which were partially offset by lower personnel expenses and favorable inventory obsolescence.

Beginning in the first quarter of 2016, QVC began allocating certain corporate costs for management reporting purposes differently, Liberty Interactive said in its press release.

Historically, QVC allocated these costs to the market from which the services were provided. As more of QVC’s costs support initiatives in multiple markets, QVC is allocating costs to the markets that will benefit from the expenditures. These management cost allocations are related to certain functions, such as merchandising, commerce platforms, information technology, human resources, legal, finance, brand and communications, corporate development and administration.

The cost allocations (from QVC U.S. to QVC International) totaled about $7 million in the fourth quarter and $31 million for 2016. As a result of the allocations, the U.S. segment’s operating income and adjusted OIBDA margins were each positively impacted approximately 35 basis points in the quarter and 50 basis points for the full year.

Evine Live Makes $5 Million In Layoffs, Cutbacks

March 24, 2016

It’s late and we’re tired, but we’re reading a transcript of Evine Live’s fourth-quarter earnings call with Wall Street analysts on Wednesday. See what we do for you guys! Anyway, we’ve already seen a bit of a bombshell.

In the transcript, provided by Seeking Alpha, CFO Tim Peterman said, “Last week, we enacted a reduction in workforce and other related costs that will result in approximately 5 million in annualized expense savings. We will continue to look for more ways to make our business more efficient.”

Interim CEO Bob Rosenblatt, who took over for ousted chief Mark Bozek, said that 45 full-time employees were laid off. We wonder if Connie Kunkle’s “early retirement” was related.

“It is mostly a matter of being able to be more efficient and more effective in terms of streamlining the organization and most of the positions were in corporate, that we took the positions out of,” Rosenblatt said according to Seeking Alpha’s transcript.

“And they ranged in high-level positions all the way down since it was 45 positions all the way down to staff positions but it was done in surgical manner and of course some other people that remain having the additional responsibilities.”

Rosenblatt also indicated that he had no plans of transforming Evine Live from a watch network, saying that the category distinguishes the channel.

He said that sales in beauty were especially strong, with brands such as Consult Beaute doing particularly well.

“On the jewelry side, we made a deliberate decision to reduce airtime which boosted productivity for the category,” Rosenblatt said. “Sales were down versus the fourth quarter of prior years, but I’m happy to report that the jewelry area continues to be one of our customers’ favorite categories.”

That’s right, Bob!

“Within the categories we experienced particularly strong sales in the following area,” he said. “Gems en Vogue, we had sales of over 11 percent; luxury diamond designer brands in general were over 104 percent. Our gemstone designer brands were up to 2 percent and our sterling silver sales were up 20 percent.”

Evine Live sold a lot of Hoverboards during the holidays, and then stories broke about the boards erupting in fire and users suffering a lot of injuries. Rosenblatt addressed that issue.

“We’re mindful of the continued situation regarding the Hoverboard products and we’ll continue to monitor the situation as our customer safety is always a prime concern of ours,” he said. “However, as you know Hoverboard’s only represent one of more than tens of thousands of products that we offer at Evine Live and as retailer these occasional issues are not unexpected.”