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.
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.”