Posts Tagged ‘Mike George’

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.

QVC’s Third-Quarter Sales Drop 6 Percent

November 8, 2016

Home shopping networks took a beating in the third quarter, with QVC seeing its revenue dive 6 percent, to $1.3 billion, just a day after HSN reported that its sales had slid.

The news about QVC, the dominant domestic shopping channel, was not surprising in at least one respect: Company honcho Mike George had warned in the second quarter that there revenue had slowed down and might take a tumble in the coming period.

HSN also had a rough go. Net sales for the third quarter were $569.7 million, a decrease of 3.5 percent from the prior year.

“The U.S. experienced declines in the electronics, beauty, jewelry and accessories categories, which were partially offset by gains in home and apparel,” QVC’s parent, Liberty Interactive Corp., said in a press release on Tuesday.

“eCommerce revenue increased 1 percent to $684 million and grew 342 basis points to 51 percent of total U.S. revenue,” the release said. “Operating income decreased 18 percent to $175 million, operating income margin declined 199 basis points, adjusted OIBDA decreased 8 percent to $308 million and adjusted OIBDA margin declined 43 basis points.”

Consolidated revenue for the QVC Group, which includes its domestic and international networks, was down 3 percent to $1.9 billion.

“We are benefiting from our diversified global model,” QVC President and CEO George said in a canned statement.

“While we are facing sales pressures in our U.S. business, we delivered local currency sales gains in every non-U.S. market in the quarter. We are responding to the immediate domestic challenges through a series of strategies to drive more balanced growth across our categories, consistently deliver exceptional customer experiences, offer outstanding values, accelerate new customer acquisition, and lower operating costs.”

He added, “And last week we were thrilled to launch Beauty iQ, the first multi-platform shopping network dedicated exclusively to beauty. These actions demonstrate our confidence in the long-term health of our unique retail model.”
QVC has now centralized many of its corporate functions in Poland, creating the network calls its “ONE Q organizational structure.

The goal is to “better leverage its global scale and capabilities, to enhance its competitive position and to create operational efficiencies,” the press release said.

Then it went on with this gobble-gook to explain the financial impact of this change. Maybe you can make heads or tails of it, cause we sure can’t.

Beginning in the first quarter of 2016, QVC began allocating certain corporate costs for management reporting purposes differently. Historically, QVC allocated these costs to the market from which the services were provided.

Now, 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 approximately $8 million in the third quarter and are expected to approximate $32 million in 2016.

As a result of the allocations, the US segment’s operating income and adjusted OIBDA margins were each positively impacted 60 basis points and the international segment’s operating income and adjusted OIBDA margins were negatively impacted 131 basis points in the third quarter.

There was no impact to consolidated operating income and adjusted OIBDA margins. With the completion of the ONE Q implementation, QVC’s financial disclosure is consistent with the way it evaluates its business performance and manages its operations.

Regarding domestic QVC, “The third quarter included the aforementioned cost allocations from ONE Q, which were mostly offset by approximately $7 million of severance expense. The results primarily reflect lower product margins and higher warehouse costs, which were partially offset by favorable inventory obsolescence and lower bonus and benefit expenses of approximately $10 and $8 million, respectively, and higher credit card income.”

Also for QVC domestic, the average selling price per unit (“ASP”) decreased 7 percent to $54.75, units sold decreased 1 percent, and returns as a percentage of gross product revenue improved 170 basis points.

QVC To Launch 24/7 Beauty Network

October 25, 2016

QVC is spinning off its online beauty channel into a full-fledged cable network.

The digital service only available now on QVC.com, Beauty iQ, will be launched on providers including DirecTV and Dish in November.

http://www.qvc.com/content/beauty/beautyiq.html

Here is Tuesday’s press release from QVC:

QVC Announces the Launch of Beauty iQ, the World’s First Live Multi-Platform Network Dedicated to Beauty

Global leader in video and e-commerce is delivering live daily programming that combines social, retail and media as one; features beauty experts, influencers and brands

West Chester, Pa. (October 25, 2016) – Beauty – all the time, anytime, anywhere. Today, QVC, Inc., the world’s leading video and ecommerce retailer, announced plans to launch the Beauty iQ network, the world’s first multiplatform beauty shopping experience, to engage beauty lovers everywhere.

Within a month of going live on October 31, Beauty iQ will be viewable in over 40 million homes in the U.S. via distributors including DirecTV, U-verse, Dish and Roku.

Through Beauty iQ, beauty lovers will be able to enjoy beauty programming 24/7, including live programming five nights a week, Wednesday through Sunday, 8:00 p.m. to midnight ET, and repeated immediately after for the West Coast audience.

The new beauty destination further bolsters QVC’s position as an innovative global, retail leader across digital and emerging platforms, at a dynamic time in the industry.

Beauty iQ will be a shoppable community for beauty lovers, experts and brands to discover their own true beauty, be inspired, and share their ideas and tips whenever they want, wherever they are. It will deliver the content they crave in one place that’s accessible everywhere – via the Beauty iQ network, BeautyiQ.com, QVC.com, on the QVC mobile app and via social channels including Facebook and Instagram.

“QVC has always been a trailblazer, creating the world’s most engaged shopping community that offers customers the combination of media, social and retail as one,” said Mike George, QVC President and CEO.

“We have a 30-year history of discovering beauty brands and trends, and bringing new products to life by leveraging the best storytellers in the business, our experienced hosts and the innovators behind the brands. We know that an amazing shopping and entertainment experience knows no boundaries. We’ve listened to our customers and fans, and we know beauty is intrinsic to their lives. So we’re engaging with them on all the platforms they love and providing a new experience that caters to their passion for beauty.”

Beauty iQ is expected to feature more than 50 prestige beauty brands including Givenchy, IT® Cosmetics, Edward Bess, Tarte, tatcha, Becca, Peter Thomas Roth, Josie Maran, and Nest and the experts behind them. This new shopping experience will highlight how-to tutorials, tips and experiences with products ranging from color cosmetics to fragrances and skin care.

“At IT Cosmetics, we believe that every woman is beautiful, and deserves to look and feel her most beautiful,” said IT Cosmetics co-founder and CEO Jamie Kern Lima. “Our relationship with QVC has allowed us to reach women across the country with this message. This is why we are so honored and excited to be part of QVC’s new Beauty iQ! This amazing platform will allow us to further spread the IT love, and transform the way women view their own beauty.”

For QVC, the beauty category represented 17% of global sales in 2015. According to Euromonitor, the beauty industry in the U.S. generated revenues of $80 billion in 2015. Of that, $32 billion came from prestige beauty brands. Beauty iQ was inspired by QVC’s strategy to address one of the fastest growing categories in the U.S. retail industry.

http://www.philly.com/philly/business/20161026_QVC_adds_24_7_beauty_network.html

Beauty is a hot category in retail in general and home shopping in particular.

QVC Debuts Polish Global Operations Center, A Viewer Sore Point

October 11, 2016

QVC announced on Tuesday that it was launching its new Global Business Services (GBS) operation based in Krakow, Poland, an act that has raised the ire of a number of its U.S. customers.

http://news.sys-con.com/node/3929488

Americans don’t like the idea of domestic jobs being shipped overseas one bit. QVC, the only one of the major u.S. home shopping networks to have international channels, is opening a huge new West Coast distribution hub in Cali, where it will hire hundreds of workers, in addition to the Polish business center. But that doesn’t assuage the critics.

QVC plans to hire 200 to 300 people over the next two for its new international business center in Europe.

“The QVC-owned GBS organization is expected to help QVC maintain its competitive edge in a vastly changing, dynamic and competitive global retail marketplace by increasing operational efficiency and establishing world-class global business practices,” according to the press release.

QVC's new Global Business Services center in Poland.

QVC's new Global Business Services center in Poland.

“Starting in 2017, QVC will centralize critical processes and services in certain areas of the company’s finance, human resources (HR), information technology (IT), and legal functions for its operations in the U.S., UK, Germany, Italy and France at the Krakow GBS. The estimated annual savings are USD $11 to $12 million once the GBS is fully operational.”

“QVC is the world’s most powerful and engaging social shopping experience, reaching millions of people worldwide,” QVC CEO Mike George said in a canned statement. “As we look to expand and adapt to a dynamic retail landscape, this model will allow us to continue to modernize how we operate as a global entity.”

Here’s what QVC says.

Staffed by QVC team members, the new center will employ best practices, standardized procedures and shared systems to deliver high-value services to the business and increase operational efficiency.

The high-quality business environment and workforce with multilingual capabilities in Krakow will help QVC best prepare for continuous, strategic growth.

QVC reaches 360 million homes worldwide through operations in the U.S., Japan, Germany, United Kingdom, Italy, France and a joint venture in China.

Zendaya Steps Up For QVC FFANY Shoe Sale

September 27, 2016

Actress-singer Zendaya — one of those one-named divas like Madonna and Cher — will be appearing in TV and print PSA’s to promote QVC’s 23rd Annual “FFANY Shoes on Sale” charitable event, the home shopping network said Tuesday.

During the three-hour broadcast, set for Oct. 20 from 6 p.m. to 9 p.m., more than 170 donated shoe styles from more than 80 brands will be on sale to raise money to fight breast cancer.

All the shoes will be offered at half the manufacturer’s suggested retail price with a minimum of 80 percent of the purchase price benefiting various breast cancer research and education institutions.

“Like most women, I love a great pair of shoes, and I especially love scoring a great deal,” Zendaya said in a canned statement. “Being a part of QVC Presents ‘FFANY Shoes on Sale’ allows me to share my passion for shoes with my fans while also demonstrating how fun it can be to contribute to such a worthwhile cause.”

The event has generated more than $50 million to date for breast cancer research and education institutions.

“Each year, we look forward to collaborating with the Fashion Footwear Association of New York and providing our customers with a unique shopping experience that not only celebrates the joy of discovery but also the joy of giving back by standing as one against a disease that affects many,” QVC’s top honcho, President and CEO Mike George, said in his canned statement.

“It is an honor to have Zendaya’s support this year and we have no doubt that her captivating spirit will endear her to viewers across the country.”

Beneficiaries for the 2016 QVC Presents “FFANY Shoes on Sale” event include: The Abramson Cancer Center of the University of Pennsylvania; The Breast Cancer Research Foundation; The Samuel Oschin Comprehensive Cancer Institute at Cedars-Sinai Medical Center; The Susan F. Smith Center for Women’s Cancers at Dana-Farber Cancer Institute; The University of Michigan Comprehensive Cancer Center’s Breast Oncology Program; The University of Pittsburgh Cancer Institute; The Winthrop P. Rockefeller Cancer Institute of the University of Arkansas for Medical Sciences; The Alvin J. Siteman Cancer Center at Barnes-Jewish Hospital and Washington University School of Medicine; and The Margie and Robert E. Petersen Breast Cancer Research Program at the John Wayne Cancer Institute at Providence Saint John’s Health Center.

QVC Layoffs Send Shock Waves

September 9, 2016

We’re going to attempt a little blogging, especially after hearing about the layoffs of about 100 folks at QVC’s HQ in West Chester this week.

We first learned the 411 after ex-QVC host Lisa Mason posted the news on Facebook, lamenting the firing of a loyal network employee who had worked there 25 years, a person who was among the others who were pink-slipped.

Basically, Mason said she was holding her tongue about what she thought of the layoffs, which was similar to what ex-host Dave King posted on Facebook about the mini-bloodbath.

This situation must be put in context: QVC CEO Mike George during a 2Q earnings called warned that the network’s sales had tailed off significantly at the end of the quarter. Belt-tightening is no surprise.

Also, earlier this year QVC warned that layoffs would be coming to Pennsy, because the company was opening up a big international distribution hub in Poland.

And finally, QVC is opening a huge Left Coast distribution facility in Cali, and is hiring a boatload of people to work there.

A number of QVC shoppers are none-too-pleased to hear that American workers are losing their jobs in West Chester, and say they will boycott the No. 1 home shopping network.

Our first thought on the layoffs was whether any show hosts were being canned, but that was not apparently the case.

Host Mary Beth Roe had a Facebook post that appeared to allude to the sad circumstances at QVC, but she didn’t specifically reference the layoffs.

As someone who was summarily laid off just a few weeks after Sully miraculously landed a jet on the Hudson, the estimated 100 that were let go at QVC have our sympathy and good thoughts.

Maybe The Troubled Brand On QVC Is WEN

August 8, 2016

Yesterday we came to the same conclusion as one of our Facebook friends about the product on QVC whose sales tanked in the second quarter: WEN by Chaz Dean.

We could be wrong, of course. But that’s our guess.

In one of our recent blogs, we quoted QVC CEO Mike George’s remarks from a 2Q earnings call with Wall Street analysts last week.

George said that one of the home shopping network’s products had seen its sales dip, according to a transcript of the call from Seeking Alpha.

http://seekingalpha.com/article/3996597-liberty-interactives-qvca-ceo-greg-maffei-q2-2016-results-earnings-call-transcript?auth_param=1cprs8:1bqa0jd:f0a01469fbb18e68747393411c7da499&uprof=53&dr=1

“Finally, one of our largest brands faced a significant drop-off in sales at QVC and other outlets, which did materially impact our overall results,” George said. “Now this particular issue is brand specific and not reflective of our overall consumer health.”

The WEN hair care products have run into a ton of trouble. Complaints from customers who lost hair after using WEN have filed a class-action suit against it, and the FDA is also investigating the complaints.

George said that the product that lost sales was sold at QVC and “other outlets,” and WEN is sold via infomercials as well as the Q.

Anyone have any more thoughts and guesses?

Which QVC Brand Tanked In 2Q? Mean Maffei

August 7, 2016

The transcript of QVC’s parent, Liberty Interactive Corp., second-quarter call with Wall Street analysts wasn’t as juicy or illuminating as HSN’s.

But we pulled a few quotes from QVC CEO Mike George from it. They come from a transcript provided by Seeking Alpha.

Maddeningly, George talks about a big drop-off in one of QVC’s brands, but does not identify which one it was as far as we can tell.

Our favorite line from George was, “Let’s not make such knee-jerk decisions that we start to really pollute the business.”

And by the way, QVC will be offering Easy-Pay less often.

http://seekingalpha.com/article/3996597-liberty-interactives-qvca-ceo-greg-maffei-q2-2016-results-earnings-call-transcript?auth_param=1cprs8:1bqa0jd:f0a01469fbb18e68747393411c7da499&uprof=53&dr=1

“We experienced strong growth in fashion, particularly in our proprietary brands such as LOGO, Isaac Mizrahi, Susan Graver and Denim & Company. Our household and garden categories also performed strongly with impressive results from home security and fitness.”

“In home decor, we saw strong performance from Northern Nights bedding and Select Comfort and Serta mattresses. These gains were partially offset by continued under performance in jewelry and consumer electronics and softening results in kitchen cook.”

“In jewelry, we were pleased with the launch of Stella & Dot and we began to build the My Saint My Hero brand with the very successful June TSV. And while sales results for the quarter were solid, our trajectory weakened late in the quarter.”

“And while harder to quantify, it appears that all of the distractions this summer from world events and the U.S. election season are also having some impact and we anticipate additional sales pressure from the Olympics starting today.”

“Finally, one of our largest brands faced a significant drop-off in sales at QVC and other outlets, which did materially impact our overall results. Now this particular issue is brand specific and not reflective of our overall consumer health.”

“While Easy-Pay remains a key component of our model, we are proceeding with this more measured approach until we see healthier customer behavior.”

“For Q3, we are excited about the launch of Belle by Kim Gravel, Hot in Hollywood denim, Naot footwear and Mario Buccellati in jewelry, among many others.”

We noticed that Liberty Interactive Greg Maffei got a little testy with Tom Forte, an analyst with Maxim, when he tried to ask more than one question.

“No. You get to ask two questions, that’s it,” Maffei scolded.

Really Greg?

Forte must have written a negative report on Liberty somewhere along the line.

QVC Reports 5 Percent Sales Gain, To $1.4 Billion

May 10, 2016

QVC’s revenue rose 5 percent to $1.4 billion in the first quarter, with operating income increasing by 14 percent, the home shopping network’s parent, Liberty Interactive Corp., reported Monday.

The domestic channel saw growth in the apparel, accessories and home categories, which was partially offset by declines in jewelry and electronics.

That compares to the 4 percent sales slide, to $578.4 million, that HSN just posted for the first quarter.

“Our fashion businesses continue to be a key driver of growth globally,” QVC President and CEO Mike George told analysts, according to a transcript from Seeking Alpha.

http://seekingalpha.com/article/3973352-liberty-interactive-qvca-gregory-b-maffei-q1-2016-results-earnings-call-transcript?part=single

“We had terrific success with proprietary designer brands such as LOGO by Lori Goldstein, Susan Graver and Lisa Rinna in the U.S.,” he said. “Our fashion businesses continue to be a key driver of growth globally. We had terrific success with proprietary designer brands such as LOGO by Lori Goldstein, Susan Graver and Lisa Rinna in the U.S. Our strong performance in accessories was driven by footwear including Vionic, Skechers and Clarks, the resurgence of the swimwear business and intimate apparel. We had several successful fashion launches in the quarter, most notably the debut of C. Wonder on an exclusive basis.”

George also talked about QVC’s partnership with NBC’s “Today Show.”

“This time, we’ve focused our attention on mom entrepreneurs, and nine of the best entrants made it to a week-long series on the ‘Today’ show, where viewers picked their favorite products,” he said. “And the winner, Krista Woods, sold out her product in a few minutes, GloveStix, on our Saturday morning program.”

On the jewelry front, George said,”Jewelry continues to be soft globally. We saw continued declines in the bronze, gold and silver categories, and we continue to refocus assets into better performing categories such as our proprietary Diamonique and Affinity brands. And we’ll be adding a number of new designer brands later this year such as Stella & Dot, Mario Buccellati, Jane Taylor and Franco P.”

QVC’s e-commerce revenue increased 10 percent to $698 million and was up to 50 percent of total U.S. revenue in the quarter from 47 percent a year ago.

Units sold increased 7 percent, the average selling-price-per-unit decreased 3 percent to $60.03 and returns as a percentage of gross product revenue improved 184 basis points.

“We generated very solid top-line growth, with local currency gains in nearly every market,” George said.

“We continued to benefit from our strategies and investments to enhance and extend the reach of our commerce platforms,” he said. “We delivered double-digit gains for both consolidated e-commerce revenue and mobile orders. Our top-line performance and the continued expansion of our commerce platforms demonstrate how strongly the QVC brand resonates with consumers.”

Greg Maffei, Liberty Interactive president and CEO, also gave QVC a shoutout.

“QVC generated another strong quarter of revenue growth, particularly in the US, and posted impressive increases in mobile penetration of orders in the US and on a consolidated basis,” he said. “Zulily started off strong in 2016 with accelerating revenue growth and a six-fold increase in adjusted OIBDA on strong operational execution.”

For the quarter, the QVC Group, which includes all the company’s international home shopping network, saw its revenue increase 22 percent to $2.4 billion and its operating income decreased 13 percent to $206 million.

QVC Bigwig Mike George’s $19.7 Million Paycheck

April 30, 2016

From what we can tell, 2015 was a very, very good year for QVC President and CEO Mike George.

He received $19.7 million in executive compensation, up from a piddling $2 million in 2014 and $1.2 million in 2013, according to a filing the home-shopping empire’s owner, Liberty Interactive, made with federal regulators this week.

That’s a lot of greenbacks!

http://ir.libertyinteractive.com/secfiling.cfm?filingid=1104659-16-115464&CIK=1355096

George’s base salary last year was $1.1 million. Most of his sizable compensation came in the form of $17.5 million in option awards.

George made more money last year than his boss, Liberty President and CEO Greg Mafffei, whose executive comp was $14.8 million.

George also did a lot better than HSN CEO Mindy Grossman, whose executive comp was $4.9 million in 2015.