Posts Tagged ‘fourth-quarter results’

HSN’s Sales Dip 2 Percent In Fourth Quarter

February 25, 2016

HSN’s net sales slid 2 percent in the fourth-quarter last year, to $778.7 million, versus the year-ago period. And revenue rose 3 percent for 2015, to $2.5 billion, the No. 2 home shopping network reported on Wednesday.

The channel’s operating income dropped 7 percent in the fourth quarter, to $89 million. And for all 2015, operating income was up a slight 1 percent, to $253,6 million.

HSN pointed out that these comparisons were against the prior year’s fourth quarter and full-year results, when net sales, gross profit and operating income was favorably impacted by $5 million of breakage (the reversal of certain customer credits) income.

In the fourth quarter HSN’s sales increased in electronics, wellness and home, offset by decreases in other categories.

“Our improvement in home was driven by the wholesale expansion of our Ingenious Designs business associated with the Joy Mangano brand into other retail outlets,” HSN Chief Financial Officer Judy Schmeling said during a conference call, according to a transcript from Seeking Alpha.

The return rate improved 30 basis points to 16.3 percent, while units shipped increased 2 percent and the average price point decreased 5 percent primarily due to changes in product mix.

Digital sales grew 1 percent with penetration increasing 100 basis points to 43.3 percent.

Gross profit decreased 4 percent in the quarter and the gross profit rate decreased 50 basis points to 32.4 percent, primarily due to the impact of recognizing the $5 million of breakage income in the prior year.

Excluding the impact of this item, the gross profit rate decreased 10 basis points largely the result of higher shipping promotions, offset by higher product margins driven by lower clearance activity and changes in product mix.

Operating expenses (excluding non-cash charges and reorganization severance costs) decreased 4 percent to $150.8 million and were 19.4 percent as a percentage of net sales compared to 19.7 percent in the prior year. The decrease was primarily due to lower compensation.

Adjusted EBITDA increased 1 percent to $101.4 million. Operating income decreased 7 percent to $89.0 million primarily due to the $5 million of breakage income recognized in the prior year.

The closing of a distribution center cost HSN $2 million in severance costs, with 70 jobs eliminated, according to Schmeling.

Here are some of Grossman’s remarks from the call:

Sales were up in our overall home business, driven by our expanded retail footprint with our Ingenious Designs products from the Joy Mangano brand. This retail rollout was strategically executed to coincide with the premiere of the Joy movie, which opened in theaters on Christmas Day.

The products, which leverage Joy Mangano’s broad customer appeal, are now available at Target, Bed Bath & Beyond, The Container Store, and Macy’s, and we’re pleased with the initial response.

Incidentally, Jennifer Lawrence won a Golden Globe for Best Actress for her performance in the movie and has been nominated for an Oscar. We’re capitalized on the increased national exposure for the brand, including appearances for Joy on Good Morning America, CBS Sunday Morning, as well as cover stories in Good Housekeeping and People, among others.

In other areas within home, warmer weather unfavorably impacted demand for climate-related products, such as heaters, flannel bedding, and fireplaces. We’re also repositioning some categories within home, particularly floor care to induce newness and differentiated products at an accelerated pace.

We had sequential improvement in our jewelry business, particularly in productivity and profitability, as we reassert our authority in this category. Although sales in jewelry were down in the quarter, primarily driven by reduced air time as we rebuilt the business, but we’re encouraged by the strong launches of both our fine jewelry and elevated fashion collection.

In fine jewelry, we launched Diamond Couture and Diamonds Unleashed by Kara Ross, and in fashion jewelry, Kristin Chenoweth and jewels by Jennifer Miller. As I’ve mentioned before, we are optimistic about this business going forward. We have a distinct delineation between brands and are building upon these and other new launches.

In apparel and accessories, our Buy Now Wear Now strategy contributed to the category’s most recent success. Our spring fashion series, which just launched emphasizes Layer Now Lighten Later, providing us with more flexibility to manage unpredictable weather patterns, while still offering new fresh items and colors into our assortment. Premieres will include Sperry, Harve Benard, Tiki and Jay Godfrey, and an exclusive handbag collection from Vince Camuto.

HSN and Cornerstone are both part of HSN Inc. In the fourth quarter, HSN Inc.’s net sales were down 2 percent, to $1.1 billion. For the year, they increased 3 percent, to $3.7 billion.

Last year, the company racked up severance costs stemming from a reorganization and planned closing of a distribution center.

“We have made progress in certain key areas, including optimizing our sophisticated digital platforms,” Grossman said in the earnings press release. “For the first time, HSNi’s digital penetration exceeded half our sales at 52 percent, with digital reaching nearly $2 billion in annual sales. Additionally, mobile now represents nearly 40 percent of total digital sales.”

“Recognizing the continued volatility in the retail environment, we remain focused on execution, working cross-functionally across the organization to drive growth,” Grossman said.

“We will continue to extend our reach to leverage our vast content across traditional and alternative platforms, curate differentiated products and experiences, build communities with customers and provide a frictionless and seamless commerce experience.”


HSN Sees 4 Percent Revenue Gain In Fourth Quarter, 5 Percent Jump For 2010

February 23, 2011

HSN’s net sales increased 4 percent in the fourth quarter, rising to $636.8 million, while total sales for 2010 were up 5 percent, to $2.11 billion, the home shopping network reported Wednesday.

But HSN saw a decline and loss in operating income, down 1 percent, to $64.2 million from $65.2 million in the fourth quarter. For the full year, operating income gained 7 percent, to $168.7 million.

HSN’s gross profit was flat, at $205.4 million, for the fourth quarter. For the full year, profit was up 4 percent, to $709.2 million.

HSN’s $636.8 million in nset sales included 9 percent sales growth at

HSN CEO Mindy Grossman

HSN Inc., which includes the Cornerstone unit, saw its net sales grew 9 percent over the prior year to $915.2 million.

Cornerstone’s net sales increased 23 percent to $278.4 million with Internet sales penetration reaching 58.6 percent.

“Following an impressive performance in the fourth quarter of 2009, HSNi grew net sales by 9 percent in the fourth quarter of 2010 led by strength in electronics, fashion and wellness at HSN and accelerated sales growth at the three largest Cornerstone brands – Frontgate, Ballard Designs and Garnet Hill,” HSNi CEO Mindy Grossman said. “Our strategic efforts to create a multichannel experience resulted in e-commerce sales growth of 15 percent for the company.”

“In 2011, we are focused on giving customers even more reasons to deepen their engagement with our brands at HSNi,” Grossman said. “We continue to strengthen our merchandise portfolio at HSN and are developing strategic partnerships to create compelling special events and experiences. At Cornerstone, we will continue to grow our customer base while driving further e-commerce penetration across the portfolio.”

HSNi’s Adjusted EBITDA increased 6 percent to $93.3 million compared to $88 million in the prior year. These results were driven by a 9 percent increase in net sales, partially offset by a 140 basis point decrease in gross profit margin and a 5 percent increase in operating expenses, excluding non-cash charges.

The increase in operating expenses was primarily related to Cornerstone. Operating income increased 3 percent to $77.4 million compared to $74.9 million in the prior year.

Adjusted earnings per share were 77 cents compared to 74 cents in the prior year. GAAP diluted EPS was 69 cents compared to 68 cents in the prior year.

HSNi’s annual net sales grew 9 percent over the prior year to $3.0 billion. HSNi’s annual adjusted EBITDA increased 25 percent to $257.6 million compared to $206.1 million in the prior year.

HSNi’s operating income increased 26 percent to $196.1 million. Included in Adjusted EBITDA and operating income for the year was a $2.5 million sales provision for a voluntary product recall at one of the Cornerstone brands and costs related to a $2.5 million legal settlement, both of which were recognized in the third quarter.

Adjusted EPS increased 35 percent to $1.92 compared to $1.42 in the prior year. GAAP diluted EPS increased 31 percent to $1.65 compared to $1.26 in the prior year. The combined impact of the product recall and legal settlement on the annual Adjusted EPS and GAAP diluted EPS was $3 million, net of taxes, or five cents per diluted share.