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INTERESTING INFO FROM PRESS CONFERENCE ON 1ST QUARTER RESULTS............

[ Edited ]

 

 

An edited transcript of QVC's Press Conference regarding the unveiling of the first quarter financials results........Here are some of the highlights pertaining to QVC's portion (it also discussed Liberty Interactive's other ventures which arent of interest).........

 

https://finance.yahoo.com/news/edited-transcript-qvca-earnings-conference-235559117.html

 

 

 

We were very pleased with the improvement in the QVC U.S. business. Revenue was down about 3% in the first quarter, a great improvement from Q4, even with approximately 1.5% of headwinds due to the absence of a leap year this year compared to last year. 

 

Thank you, Mark. I'd like to start today's call by just taking a moment to appreciate our more than 17,000 QVC team members around the world, who, in good times and in bad, remain passionately dedicated to our customers and our values and our business. And their focus and their determination, I think, are beautifully reflected in our results this quarter. While our sales are still not where we want them to be, the substantial improvement in the U.S. sales trend, the consistent performance internationally, the significant increase in profit margins despite the promotional environment at retail, the numerous recognitions we've recently received for customer service, these are all wonderful testament to our QVC people. And I'm grateful for their efforts to go above and beyond every day.

 

As we discussed, our first priority is driving more balanced growth across categories. In Q1, we achieved gains in apparel and beauty and good sequential improvement in the 5 underperforming category segments that pressured our results last year. Those segments, jewelry, electronics, kitchen/cook, hair care and handbags, were approximately 31% of the sales mix in Q1 and declined 11% year-over-year compared to the 19% decline in Q4 and the 24% decline in Q3.

 

To achieve more balanced growth across categories, we are leaning into our core brand values of discovery, freshness and diversity. In Q1, we introduced 95 new brands. That's a 27% year-over-year increase, and we increased the number of new items launched across all brands by 12%. In beauty alone, we've introduced 24 new brands year-to-date. Top Q1 launches include Kristofer Buckle, which sold out of all items; the relaunch of Bobbi Brown; and skincare brand, Crepe Erase. In apparel, we're seeing a continued strong performance of newer brands, Peace Love World, Belle by Kim Gravel and Hot in Hollywood, along with strength in many of our exclusive lifestyle brands like Lori Goldstein and Isaac Mizrahi Live! In footwear, we launched Ed by Ellen DeGeneres in March to strong initial results. And looking to Q2, we have many additional new brands launching in footwear, accessories, travel and handbags. In particular, we're excited about the addition of MEPHISTO and Gentle Souls by Kenneth Cole in footwear and the launch of our leading European handbag line, Kipling. It's also worthy to mention that we introduced Dooney & Bourke on zulily in Q1 to strong results.

 

In home, we're focused on diversity and discovery. We launched nearly 30 new brands in kitchen/cook and another 26 in household and garden in Q1. Food, gardening, fitness and mattresses were leading category segments, with particular strength from Fitbit, Total Gym and Serta. And in April, we saw strong performance in home automation with Ring Doorbell. In electronics, we reduced airtime and drove improved permanent productivity. Areas of strength included smart home with Blink Home Security and all-in-one and 2-in-1 touch laptops. And Amazon continues to be one of our fastest-growing vendors in both Echo and tablets. In jewelry, having focused last year on clearing out stale inventory to make room for fresh product, we were able to increase the number of new items over 50% in the quarter. We were especially pleased with the launch of Lola Rose, a top jewelry brand in our U.K. business, as well as the reintroduction of the Imperial Gold brand, which has not been on QVC for 5 years.

 

Our second strategy in the U.S. turnaround is to accelerate new customer acquisition. And while U.S. new customer growth declined moderately in Q1, the trend improved significantly from full year '16. And more importantly, we saw solid growth in new customers per minute in most of our category segments, adjusting for leap year, with those gains offset by unfavorable category mix.

 

Expanding reach and relevance across broadcast and digital platforms is the third key strategy in our U.S. business. Our actions are designed to increase the number of purchase occasions we capture from existing customers and to increase the number of new customers acquired. We've been encouraged by the performance of our second U.S. network. And on April 1, we renamed and relaunched the channel as QVC2 as part of our strategy to build QVC2 into a destination network. We introduced a Deal of the Day, the QVC2 Big Deal, similar to our main channel TSV, which has generated strong early results with 5 sellouts to date. We've doubled the number of live hours per week to 40 to capitalize on the higher productivity of live shows. We're creating new and unique programming and destination shows that are exclusive to QVC2 such as In the Kitchen with Mary, PM Style with Leah and AM Style with Gabrielle. And over time, we intend to build a portfolio of brands that are primarily or only available on QVC2.

We continue to be pleased with Beauty iQ, our third U.S. network, which was launched last fall and currently reaches more than 40 million homes, including the addition of Verizon HD in Q1 with 20 hours of live programming. Now the Beauty Steal, the network's equivalent of the TSV, has performed well with 4 sellouts to date. We're utilizing social programs to extend Beauty iQ's reach and drive engagement, including launching a monthly blogger program, in which top-tier beauty bloggers will create videos, feature new beauty product or topic. The blogger segments will appear on Beauty iQ and be promoted on their social networks along with ours.

 

We've also initiated #qtbeauty, a monthly trend identified by our beauty buyers. And we continue to utilize compelling events, remotes and celebrity connections across our business that generate entertaining, engaging programming across networks and to extend our reach.

 

We hosted and inspired style remote broadcast from New York City during Fashion Week. Last month, we aired a 2-hour remote event from Lisa Rinna's California home to celebrate the fifth anniversary of her product line on QVC. We simulcast the show on Facebook Live, reaching nearly 1 million people, our most popular Facebook Live broadcast to date. Program host David Venable and QVC vendor Rachael Ray teamed up with a segment on the Rachael Ray Show. And later in May, we'll broadcast In the Kitchen with David from San Francisco. And for the third year, we've teamed up with NBC's TODAY Show. We're giving vendors a chance to earn a spot on QVC. Like the previous year, this year's winner sold out his product, Frywall, a silicone splatter guard, during the on-air broadcast on QVC. And last week, we were really excited to announce a new multiyear agreement for the Martha Stewart brand. Under this agreement, QVC will launch several categories for the brand, including skincare, fashion apparel and food and beverage. The new collaboration is expected to launch in the second half of this year and will feature frequent appearances with dedicated programming on QVC, QVC2 and Beauty iQ by Martha and a team of Martha's favorite experts as they showcase new products and share tips on how to incorporate them into everyday living. QVC, at its core, is about the joy of discovery and the power of relationships, and few do a better job of connecting with fans and inspiring them to embrace new ideas than Martha Stewart. And so we really look forward to this new collaboration.

 

And finally, on the U.S., it's worth noting that throughout the U.S. downturn, we maintained an intense focus, as we always do, on customer service. And so we were especially proud to be recognized for this commitment. QVC was tied for the #1 retailer in 2017 -- in the 2017 Temkin Experience Ratings. And in the 2017 Stevie Awards, we received a gold award for e-commerce customer service and a silver for the retail customer service department of the year. We're further advancing our focus on customer service by combining QVC and zulily's customer service organizations under a common management structure. And we're integrating Facebook Messenger under our platform, learning from zulily's pioneering work with Messenger, giving customers another medium to interact with us for customer service.

 

On consumer electronics, is connected home a big enough category to offset the transition to tablet from desktop/laptop and kind of a lackluster TV? Or is that going to be just a continued challenging category until you see something either on the tablet or TV side?

--------------------------------------------------------------------------------

Michael A. George, QVC Group - CEO and Director [22]

--------------------------------------------------------------------------------

Thanks, Tom. I would say, today, connected home is not big enough to fill in for a declining computer and tablet business. So we're -- I would say we're cautious in the outlook for consumer electronics. As I mentioned, we did further pull back airtime in the quarter and saw improved sales per minute as a result, but not kind of absolute growth. I would hope that we're past the worst of the pressure because we have now kind of anniversary-ed a very large computer and tablet business. And we've seen some innovations in some segments, the all-in-ones and 2-in-1s, as I've mentioned. So what I would hope is, as we've seen some steep declines in computer and tablet, those start to just sort of naturally moderate. And there's some innovations in some subsegments of those categories, and then we start to see some growth for connected home. But whether all that adds up to top line growth in consumer electronics, we'll have to see. We're not necessarily banking on that and believe we have to have other vehicles for growth.

 

 

ZULILY COMMENTS---

We experienced strong growth in our home business, which typically has slightly lower margins. We expect some margin pressure to continue through the rest of the year as we invest in technology in our third-party fulfillment service offering at our new Bethlehem, Pennsylvania facility.

 

Our emphasis on delivering unique products and differentiated brands at great values is what attracts and then keeps our customers coming back to us again and again. Our loyal customers continue to engage with us, with 93% of purchases during Q1 of 2017 coming from existing customers, up from 90% last year.

 

We saw strong growth in our women's and home categories, and we're excited to introduce our customers to some great new brands, such as Dooney & Bourke, which we leverage from the QVC brand portfolio, and Banana Republic Factory.

 

As we continue to see strong growth in categories like women's and home, we've seen sales softness in our kids business. Our merchandising and marketing teams are focused on updating our offering to drive growth in this category, which we believe represents a strong long-term opportunity for our business. Last year, our focus was primarily on improving the daily customer experience and driving efficiency in our marketing spend. This resulted in some pullback in marketing spend, particularly in Q4, which is now resulting in headwinds to demand in Q1.

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Honored Contributor
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Re: INTERESTING INFO FROM PRESS CONFERENCE ON 1ST QUARTER RESULTS............

@stevieb

 

Okay Stevie what's up with this

 

And in the 2017 Stevie Awards, we received a gold award for e-commerce customer service and a silver for the retail customer service department of the year.

 

 

.....have you been holding out on us?????????Woman Wink

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Honored Contributor
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Re: INTERESTING INFO FROM PRESS CONFERENCE ON 1ST QUARTER RESULTS............

Oh come on @Spurt... You know better... They'd get no awards for me, even if I think their CS department is better than average... I have to admit, I'm stumped by what they mean by 'e-commerce customer service'... Who  knew...

 

Woman Surprised


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Honored Contributor
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Re: INTERESTING INFO FROM PRESS CONFERENCE ON 1ST QUARTER RESULTS............

@Spurt... The absence of a Leap Year... I'm literally laughing out loud... Any port in a storm, I guess...

 

 

 

 


In my pantry with my cupcakes...
Honored Contributor
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Re: INTERESTING INFO FROM PRESS CONFERENCE ON 1ST QUARTER RESULTS............


@stevieb wrote:

@Spurt... The absence of a Leap Year... I'm literally laughing out loud... Any port in a storm, I guess...

 

 

 

 


@stevieb

 

I'm telling ya Stevie QVC provides some of the best comedy around these days...LOL!

 

And in future press conferences we will probably hear that a sharp decline in the belief in the Easter Bunny has impacted sales for the second Quarter..........Woman LOL

Animals are reliable, full of love, true in their affections, grateful. Difficult standards for people to live up to.”
Honored Contributor
Posts: 65,932
Registered: ‎03-10-2010

Re: INTERESTING INFO FROM PRESS CONFERENCE ON 1ST QUARTER RESULTS............


@Spurt wrote:

@stevieb wrote:

@Spurt... The absence of a Leap Year... I'm literally laughing out loud... Any port in a storm, I guess...

 

 

 

 


@stevieb

 

I'm telling ya Stevie QVC provides some of the best comedy around these days...LOL!

 

And in future press conferences we will probably hear that a sharp decline in the belief in the Easter Bunny has impacted sales for the second Quarter..........Woman LOL


@Spurt Well you know, Easter came late this year... I'm sure that's good for at least part of a news conference... Yes, comedy... positively slapstick...

 

 


In my pantry with my cupcakes...
Honored Contributor
Posts: 34,340
Registered: ‎03-20-2010

Re: INTERESTING INFO FROM PRESS CONFERENCE ON 1ST QUARTER RESULTS............


@stevieb wrote:

@Spurt wrote:

@stevieb wrote:

@Spurt... The absence of a Leap Year... I'm literally laughing out loud... Any port in a storm, I guess...

 

 

 

 


@stevieb

 

I'm telling ya Stevie QVC provides some of the best comedy around these days...LOL!

 

And in future press conferences we will probably hear that a sharp decline in the belief in the Easter Bunny has impacted sales for the second Quarter..........Woman LOL


@Spurt Well you know, Easter came late this year... I'm sure that's good for at least part of a news conference... Yes, comedy... positively slapstick...

 

 


@stevieb

 

All the hullabaloo for NY Fashion week, and they sent Amy and Crew to Beverly Hills to do the Lisa Rinna Show and David will be next with a show in San Francisco.....they can spend allthis money but they cant put adhesive on return labels....go figure!!!

Animals are reliable, full of love, true in their affections, grateful. Difficult standards for people to live up to.”
Honored Contributor
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Re: INTERESTING INFO FROM PRESS CONFERENCE ON 1ST QUARTER RESULTS............

[ Edited ]

@Spurt I won't be following the link because I just don't think I can take it... but skimming your summary was quite an experience and as soon as I stop gagging/heavng and/or laughing... I might have more to say... Not now, though, because I'm fully overwhelmed with just how really full. of. it. someone... truly is...


In my pantry with my cupcakes...
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Re: INTERESTING INFO FROM PRESS CONFERENCE ON 1ST QUARTER RESULTS............

Zjwo4h.gif

"Never argue with a fool. Onlookers may not be able to tell the difference."


220-AuCC-US-CRM-Header-Update.gif

Honored Contributor
Posts: 34,340
Registered: ‎03-20-2010

Re: INTERESTING INFO FROM PRESS CONFERENCE ON 1ST QUARTER RESULTS............


@stevieb wrote:

@Spurt I won't be following the link because I just don't think I can take it... but skimming your summary was quite an experience and as soon as I stop gagging/heavng and/or laughing... I might have more to say... Not now, though, because I'm fully overwhelmed with just how really full. of. it. someone... truly is...


@stevieb

 

I hope your sides have recovered from laughing so hard but here's another chuckle regarding electronics---

 

...."I would say, today, connected home is not big enough to fill in for a declining computer and tablet business. So we're -- I would say we're cautious in the outlook for consumer electronics. As I mentioned, we did further pull back airtime in the quarter and saw improved sales per minute as a result, but not kind of absolute growth. I would hope that we're past the worst of the pressure because we have now kind of anniversary-ed a very large computer and tablet business. And we've seen some innovations in some segments, the all-in-ones and 2-in-1s, as I've mentioned. So what I would hope is, as we've seen some steep declines in computer and tablet, those start to just sort of naturally moderate. And there's some innovations in some subsegments of those categories, and then we start to see some growth for connected home. But whether all that adds up to top line growth in consumer electronics, we'll have to see. We're not necessarily banking on that and believe we have to have other vehicles for growth."

 

 

I mean really how many YEARS (not just quarters) do they have to see before they "give up the ghost" as it were with electronics.....And just the sneak peek of watching David Venable's promos for "Connected Home" that doesn't look very promising at all either.....Woman Frustrated...............

Animals are reliable, full of love, true in their affections, grateful. Difficult standards for people to live up to.”