SECOND QUARTER RESULTS FOR QVC AND HSN!

And with more emphasis on QVC's international market here's how it went-

QVC's international revenue in US Dollars increased 2% to $662 million in the second quarter. The results included the positive impact of the weakening of the US Dollar against the Euro and UK Pound Sterling, which was partially offset by the strengthening of the US Dollar against the Japanese Yen. Adjusted OIBDA was flat at $114 million and adjusted OIBDA margin decreased 35 basis points.

QVC Japan's revenue declined 11% in local currency in the second quarter primarily due to declines in all categories except electronics. The declines in QVC Japan's sales in local currency were primarily due to a local consumption tax increase that became effective April 1, 2014. ASP in local currency decreased 3% and units sold declined 8%. Returns as a percentage of gross product revenue in local currency increased 46 basis points. Adjusted OIBDA in local currency decreased 22% and adjusted OIBDA margin decreased 264 basis points. The decrease in adjusted OIBDA margin was primarily due to lack of sales leverage on fixed costs, higher programming distribution expenses and lower product margins.

QVC Germany's revenue increased 5% in local currency in the second quarter. Germany experienced gains in the home category, partially offset by declines in apparel and jewelry. ASP in local currency increased 2% and units sold decreased 3%. Returns as a percentage of gross product revenue in local currency improved 457 basis points primarily due to a positive mix shift from the apparel and jewelry categories to home, which typically returns at lower rates, and to a lesser extent, lower return rates in all categories.

QVC UK's revenue grew 6% in local currency in the second quarter primarily due to gains in the beauty, accessories, apparel and jewelry categories, partially offset by a decline in electronics. ASP in local currency was flat and units sold increased 6%. Returns as a percentage of gross product revenue in local currency improved 27 basis points. Adjusted OIBDA in local currency increased 18% and adjusted OIBDA margin increased 155 basis points. The increase in adjusted OIBDA margin was primarily due to higher product margins.

QVC Italy's revenue increased 9% in local currency in the second quarter primarily due to gains in the beauty, accessories and apparel categories. ASP in local currency increased 1% and units sold increased 8%. Returns as a percentage of gross product revenue in local currency improved 66 basis points. The adjusted OIBDA deficit in local currency improved 68% and adjusted OIBDA margin improved 791 basis points. The increase in adjusted OIBDA margin was primarily due to the revenue growth, lower customer service costs as a result of increased digital ordering and lower product distribution costs.

CNRS, QVC's joint venture in China, operating under the brand CNR Mall, generated revenue growth of 27% in local currency in the second quarter. Adjusted OIBDA deficit in local currency decreased 5% primarily due to revenue growth and higher product margins, partially offset by higher programming distribution costs. This joint venture is being accounted for as an equity method investment, and as a result, QVC reported a $2 million reduction in net income in the second quarter.

BOTH Channels should take note that sales of ELECTRONICS and JEWELRY continue to DECLINE!!!!!!! Let me repeat----ELECTRONICS AND JEWELRY CONTINUE TO DECLINE!!!!(except for electronics in Japan--go figure)

So ENOUGH of these all day marathons of computers/tablets/TV's/Chargers etc etc.....

And QVC in particular David M (jewelry buyer) ENOUGH of bronzo, the Italian Fair, and "deals" you are getting from the Italian factories .... Apparently customers don't like what you are bringing in...you better go in a different direction if you want sales!!!!!

And increase in QVC.com revenue is not in addition, all that means is out of all their sales more people are placing their order online ..... could it be QVC's BORING TV programming !!!!

QVC US revenue by 3% and adjusted OIBDA⁽²⁾ by 2% in the second quarter

• QVC US operating income decreased by 2%
• QVC.com revenue as a percent of total US revenue increased to 43%, a 157 basis points increase
• QVC US mobile penetration was 37% of QVC.com orders

Well, I'm not surprised ......

Jewelry, for the most part, is purchased with discretionary income ..... it's not a necessity like food and water. As a result, they'll need to keep bringing in new jewelry designers and lines to keep the gals buying!

As for electronics, they are generally a bigger ticket item ..... I bought a laptop in December and will keep this for a while. I see no need to get a new printer (or anything else) because they continue to be in working order.

The only things that seem to be more of a "discretionary" electronic purchase are TVs and cell phones ...... people will buy the "newer" model, when their current one is still working fine.

That's my two cents on the subject.

So, if I were an investor, I'd look at HSN perhaps, but as a product buyer and occasional watcher, I don't give a hoot.

On 8/10/2014 millieshops said:

So, if I were an investor, I'd look at HSN perhaps, but as a product buyer and occasional watcher, I don't give a hoot.

And as a shopper and occasional watcher, I'm looking for deals, which I'm not finding, and variety, which I'm also not finding, so perhaps those of the same ilk are feeding into the meager growth (and high returns), based on the Q decision makers continuing to do the same thing, on and on, and expecting different results!

So the Q is doing well everywhere but Japan and here... Since electronics did so well there, maybe they could schedule their marathons there and give US a break... Looks like prices were up at HSN too and even more than here. Of course, I'm not sure HSN uses shipping as a means to garner revenue to the same extent as reportedly does QVC...

Personally, I'm not surprised that electronics are not the big seller they'd like them to be, given they're big ticket items. I firmly believe QVC has so saturated their base with them that there's little room for growth in this area... And let's face it, how many 'drive by' customers are going to drop everything to order a computer...?

It's sad, to me, that jewelry sales continue to flag, but I agree that a certain amount of that is based on the lousy items the Q's buyers persist in putting out there... There's also absolutely no middle ground with QVC's jewelry anymore... With VERY few exceptions, everything offered is either glorified costume (third tier and fake gemstones along with mystery metals) or is priced off the charts... Perhaps an infusion of mid-range semi-precious gemstones would sell but the steady diet of spinel and bronzo, which perhaps isn't going over so well, together with very pricey jewelry, which isn't going to sell in volume, clearly isn't going to garner the jewelry business they once did... Again, it all gets back to variety, a reality to which the Q bosses seem oblivious to or in denial of...

I don't know about Electronics, but I'm not surprised their jewelry line has dropped. It's all that Bronzo, Stainless Steel, Spinell push, and charging fine jewelry prices instead of fashion jewelry prices.

Its no surprise with jewelry. The choices they offer aren't that great and its rare to find a jewelry show on of an evening. The majority of the jewelry shows are on in the afternoon or early morning hours. Also the best hosts for jewelry shows rarely host them anymore. They have them hosting clothing and beauty related shows all the time.