HSN saw its net sales jump 9 percent in the first quarter to $518.9 million, the home shopping network reported Wednesday.
Revenue for all of HSNi, both HSN and the Cornerstone unit, also saw a 9 percent gain in the quarter, to $683.2 million.
“We are extremely pleased with HSNi’s first quarter performance as we nearly doubled EBITDA on the strength of a 9 percent net sales gain and a 110 basis point increase in gross profit,” HSN CEO Mindy Grossman said in a canned statement.
“HSN net sales grew 9 percent, including a 15 percent increase at HSN.com as we leveraged our content across multiple channels,” Grossman said. “At Cornerstone, performance continues to improve with the business delivering positive sales growth for the first time in more than two years. We believe these accomplishments reaffirm the effectiveness of the strategies we are employing to drive profitable growth at HSNi.”
Net sales for HSN increased 9 percent led by strong growth in electronics, wellness and fashion. HSN.com sales increased 15 percent over the prior year and now represent 31.6 percent of HSN’s net sales, up from 30 percent in the prior year. Units shipped increased 6 percent and the average price point increased 4 percent due to less promotional activity and product mix.
Gross profit increased 13 percent to $171.6 million and gross profit margin improved 110 basis points to 33.1 percent. The improvement in gross profit was driven mainly by improved product margins due to less promotional activity.
Adjusted EBITDA increased 43 percent to $50.3 million from $35.3 million as a result of increased gross profit, partially offset by a 4 percent increase in operating expenses, excluding non-cash charges. Operating income increased 50 percent to $39.3 million compared to $26.2 million in the prior year.
Adjusted EBITDA both HSN and Cornerstone increased 99 percent to $51.8 million driven by a 9 percent increase in net sales, a 110 basis point increase in gross profit margin and leverage over operating expenses. Operating income increased 170 percent to $37.5 million compared to $13.9 million in the prior year.
Adjusted earnings per share increased 350 percent to 36 cents from 8 cents in the prior year.