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Honored Contributor
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Registered: ‎03-20-2010

QVC/HSN-QURATE 4th QUARTER & YEAR END 2018 RESULTS!

[ Edited ]

Quick review of the past---

QVC’s revenue in the third quarter was up 3 percent — to $1.42 billion — when you include the $26 million in credit-card revenue. However, excluding the accounting change, QVC  revenue grew 1% in the third quarter of 2018. (In the 2nd Quarter it was 4% with the new accounting procedure and 3% excluding it)

 

So what were the results for the 4th quarter and for entire yearof 2018 QVC?

 

 

  • QVC US increased revenue 3% in both Q4 and full year 2018 as reported
    • Revenue increased 2% in both Q4 and full year 2018 on a comparative basis excluding impact of new accounting standards regarding credit card income.

In the fourth quarter, QVC US realized sales gains primarily in electronics, apparel and accessories, which were partially offset by declines mainly in home. For the full year, QVC US realized gains primarily in accessories and apparel, which were partially offset by declines principally in jewelry.

 

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As a result of Qurate Retail’s adoption of ASC 606, QVC US revenue for the three months and year ended December 31, 2018 includes an additional $24 and $102 million of revenue, respectively, from its private label credit card program which was previously classified as an offset to SG&A expenses. Excluding the impact of this accounting adjustment, QVC US revenue grew 2% in both the fourth quarter and full year.

 

ASC 606 as it relates to recognizing revenue at the time of shipment rather than delivery, which had an immaterial impact on reported revenue and adjusted OIBDA in the fourth quarter and full year.

 

 

 

 

  • QVC International revenue declined 3% in Q4 and increased 4% in full year 2018 as reported
    • Revenue declined 1% in Q4 and increased 1% in full year 2018 in constant currency(3)

In the fourth quarter, QVC International experienced year-over-year constant currency(3) sales declines primarily in accessories and apparel, which were partially offset by gains mainly in beauty. For the full year, QVC International realized gains primarily in beauty and home, partially offset by declines principally in apparel.

 

 

  • HSN revenue declined 1% in Q4 and declined 6% in full year 2018 as reported
    • Revenue declined 1% and 7% in Q4 and full year 2018, respectively, on a comparative basis excluding impact of new accounting standards regarding credit card income

In the fourth quarter, HSN realized sales declines in electronics and jewelry, which were partially offset by gains primarily in accessories, beauty and apparel. For the full year, HSN realized declines in all categories.

 

 

  • zulily revenue increased 6% in Q4 and 13% in full year 2018

Revenue increased in the fourth quarter and full year due to strong customer acquisition. For the quarter, operating loss improved due to lower purchase accounting amortization. Adjusted OIBDA declined mainly due to higher freight, fixed and marketing expenses, which were partially offset by higher product margins and private label credit card income. For the full year, operating loss and adjusted OIBDA improved due to sales growth including the ramp up of zulily’s private label credit card income, as well as higher product margins and leverage of fixed and operating expenses. These gains were partially offset by higher freight and marketing costs. The impact of ASC 606 as it relates to recognizing revenue at the time of shipment rather than delivery had a negative impact on reported revenue and adjusted OIBDA in the fourth quarter, but did not materially impact full year reported revenue and adjusted OIBDA.

 

Cornerstone

Revenue declined in the fourth quarter and full year primarily driven by the shutdown of the Improvements catalog business effective December 2018 and weakness at Frontgate and Grandin Road, partially offset by growth at Garnet Hill and Ballard Designs. In the fourth quarter, operating income and adjusted OIBDA declines were principally driven by lower sales and higher employee-related costs, which were partially offset by lower marketing expenses. Full year operating income and adjusted OIBDA declines were primarily driven by lower sales, an inventory obsolescence provision for the closure of the Improvements’ facility and higher fixed costs, which were partially offset by lower marketing expenses. Operating income in the fourth quarter and full year 2018 included $5 million and $8 million, respectively, of severance and restructuring costs (including costs related to the closing of Improvements), as well as higher purchase accounting amortization and the aforementioned impairment charge.

Animals are reliable, full of love, true in their affections, grateful. Difficult standards for people to live up to.”
Respected Contributor
Posts: 2,160
Registered: ‎03-31-2010

Re: QVC/HSN-QURATE 4th QUARTER & YEAR END 2018 RESULTS!

Interesting information especially decline in HSN sales.  Thank you for posting.

Honored Contributor
Posts: 33,629
Registered: ‎03-20-2010

Re: QVC/HSN-QURATE 4th QUARTER & YEAR END 2018 RESULTS!

Observations---

 

Zulilly seems to be Qurates shinning star

 

QVC USA comparable revenue is stagnant......

 

Home and jewelry continue to decline...Valerie's items have lots of sell outs, but maybe customers have reached their saturation point with vacuum's, Kitchen Aid Mixers, Vitamix, humidifiers, ladders, heaters, lanterns, copper chef, and same ole kitchen gadgets......products are limited, redundant and boring....

 

Showing jewelry on Q2 doesn't help, lots of customers dont get the channel and dont want to stream on an electronic device

Animals are reliable, full of love, true in their affections, grateful. Difficult standards for people to live up to.”
Honored Contributor
Posts: 69,390
Registered: ‎03-10-2010

Re: QVC/HSN-QURATE 4th QUARTER & YEAR END 2018 RESULTS!

@Spurt.  Thanks for posting this very interesting report.  It sounds like HSN is in the pits; no wonder they're withdrawing coupons they've previously sent out.  Too many generous giveaways and poor management.

 

Zulily on the other hand is going great guns, thanks in large part to me.  I've subsidised them very generously the past 3 years and have found it to be a fun place to shop.  I even like the long wait to get merchandise; it's like waiting for Christmas.  I don't think the bargains are as plentiful or the merchandise is as nice as it was in the past.

 

Watching Qurate evolve has been both interesting and educational.  I never knew retail businesses engaged in such scheming and plotting.  They can be vicious.

New Mexico☀️Land Of Enchantment
Esteemed Contributor
Posts: 6,742
Registered: ‎10-30-2010

Re: QVC/HSN-QURATE 4th QUARTER & YEAR END 2018 RESULTS!

HSN does not seem to be doing well at all. Perhaps that is why they have been dumping products from QVC to HSN.

 

QVC seems to be doing as expected.

 

 Zulily is definitely the star. I am not a fan of Zulily, I purchased one or two items a few years back. I don't remember being impressed, and I did not care for the wait time. This was before they were purchased by QVC or Qurate whomever owns them, so perhaps things have changed. 

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Registered: ‎01-22-2016

Re: QVC/HSN-QURATE 4th QUARTER & YEAR END 2018 RESULTS!

[ Edited ]

Ecclissi J360975 watch Heart

Honored Contributor
Posts: 69,390
Registered: ‎03-10-2010

Re: QVC/HSN-QURATE 4th QUARTER & YEAR END 2018 RESULTS!

In the lineup for BBSD are pieces I bought from QVC almost 15 years ago.  I don't even bother watching these shows of old, stale merchandise.

New Mexico☀️Land Of Enchantment
Honored Contributor
Posts: 12,944
Registered: ‎10-09-2012

Re: QVC/HSN-QURATE 4th QUARTER & YEAR END 2018 RESULTS!

[ Edited ]

@Spurt wrote:

Observations---

 

Zulilly seems to be Qurates shinning star

 

QVC USA comparable revenue is stagnant......

 

Home and jewelry continue to decline...Valerie's items have lots of sell outs, but maybe customers have reached their saturation point with vacuum's, Kitchen Aid Mixers, Vitamix, humidifiers, ladders, heaters, lanterns, copper chef, and same ole kitchen gadgets......products are limited, redundant and boring....

 

Showing jewelry on Q2 doesn't help, lots of customers dont get the channel and dont want to stream on an electronic device


 

Thank you or sharing this  @Spurt.

 

I disagree on one characterization though.  I do not think that QVC US is stagnant. 

 

The results show that QVC US is actually growing nicely, more in some units than others which have declined.  Revenue increasing over $2 Billion is good for this competitive market.  QVC International, not doing so well.

 

QVC US saw its highest new customer base increase in 33 years, and has gains in its digital and mobile platforms. 

 

@Kachina624  I wish we had stock in Zulily; like you, I've purchased quite a bit from them in the past couple of years.   Smiley Happy

Honored Contributor
Posts: 33,629
Registered: ‎03-20-2010

Re: QVC/HSN-QURATE 4th QUARTER & YEAR END 2018 RESULTS!

[ Edited ]

@Caaareful Shopper wrote:

@Spurt wrote:

Observations---

 

Zulilly seems to be Qurates shinning star

 

QVC USA comparable revenue is stagnant......

 

Home and jewelry continue to decline...Valerie's items have lots of sell outs, but maybe customers have reached their saturation point with vacuum's, Kitchen Aid Mixers, Vitamix, humidifiers, ladders, heaters, lanterns, copper chef, and same ole kitchen gadgets......products are limited, redundant and boring....

 

Showing jewelry on Q2 doesn't help, lots of customers dont get the channel and dont want to stream on an electronic device


 

Thank you or sharing this  @Spurt.

 

I disagree on one characterization though.  I do not think that QVC US is stagnant. 

 

The results show that QVC US is actually growing nicely, more in some units than others which have declined.  Revenue increasing over $2 Billion is good for this competitive market.  QVC International, not doing so well.

 

QVC US saw its highest new customer base increase in 33 years, and has gains in its digital and mobile platforms. 

 

@Kachina624  I wish we had stock in Zulily; like you, I've purchased quite a bit from them in the past couple of years.   Smiley Happy


 

@Caaareful Shopper 

 

It was a couple years ago when revenues increased 6% and 5%.....and now at 3%...competitors in U.S. are doing better...Why all the spiffing up if QVC is doing so well....???

 

QVC EXECs like to spin things for their benefit.  The unanswered questions I have are.....

 

Do the gains in digital platforms and mobile devices just mean less people are calling operators to place orders???  What's the purpose of this stat...possibly more layoffs as less operators are needed???

 

Have new customers returned to make other purchases or was it a one time purchase because QVC happened to have a good deal???????

 

Are the new customers enough to offset other customers that stopped shopping at QVC or passed away (QVC does seems to appeal to a 50 yr old and up demographic and that was a concern in past financial teleconferences)....

 

This is what CEO Mike George told CNBC back in 2015 and he had a bit of a different point of view back then.... 

 

In an interview with CNBC QVC Management admitted that over the past two years it became too focused on quickly growing its customer base. As a result, it ended up recruiting consumers who had a lower-than-expected retention rate, and a lesser lifetime value.

 

Although QVC CEO Mike George said Zulily is already making strides in learning how to attract a more loyal customer, it's something his company, which generates 90 percent of its sales from repeat customers, can help accelerate.

"What I think we've learned over the years is, how do you earn that new customer who's going to stick with you, [and] who's not just there to buy the item on sale," George said.

 

"Traditionally, our marketing spend has been primarily on customer acquisition with only modest attention towards customers who had stopped purchasing from us," Darrell Cavens said. "As we better understand the impact different types of ads have on lifetime value, we also see greater opportunities to tailor our messaging to customers post-acquisition."

 

Other challenges facing QVC in the modern world include cord cutters, an ability to obtain and hold onto premium channel placement and adjacencies, and keeping the attention of shoppers who are constantly consuming multiple forms of media at a time.

 

The company does face a headwind in that it still charges shipping fees on many products, and returns cost between $6.95 and $10.95 for nondefective items, depending on their weight. That could deter new customers from shopping on the site.

 

 

**********************************************************

Now no one can touch Amazon BUT personally here's the company I'd invest in, here's their data.....

 

  • Q4 above-plan consolidated comp store sales increase of 6%, over last year’s 4% increase
  • Customer traffic was the primary driver of the comp sales increases at every division for Q4 and FY19
  • Q4 net sales of $11.1 billion
  • Q4 diluted EPS of $.68 exceeds high-end of guidance
  • FY19 above-plan consolidated comp store sales increase of 6%, over last year’s 2% increase
  • FY19 (52 weeks) net sales increased 9% to $39.0 billion, over the 53-week period last year

This is TJX Companies.... @stevieb looks like we shop at a popular winner....

 

 

 

Other retailers:

Target 4th quarter:

  • Comparable sales grew 5.7 percent in the November/December period. Given last year’s increase of 3.4 percent over that same period, comparable sales have grown more than 9 percent over the last two years.
  • November/December comparable sales growth was driven primarily by traffic, combined with a small increase in average ticket.
  • Store Pickup plus Drive Up grew more than 60 percent from a year ago, and accounted for a quarter of the Company’s digital sales in those two months.
    • Comparable digital sales growth of 29 percent in November/December was driven entirely by growth in store-fulfilled digital sales.
    • For full year 2018, Target is on track to grow digital sales more than 25 percent for the fifth consecutive year.
  • All five of the Company’s core merchandise categories saw comparable sales growth in the November/December period. Growth was strongest in Toys, Baby and Seasonal Gift items.

 

Even Dillards had a 3% increase.....

Animals are reliable, full of love, true in their affections, grateful. Difficult standards for people to live up to.”
Honored Contributor
Posts: 69,390
Registered: ‎03-10-2010

Re: QVC/HSN-QURATE 4th QUARTER & YEAR END 2018 RESULTS!

@Caaareful Shopper.  What do you mostly buy at Zulily?  I get a lot of shoes but I've also gotten some beautiful things for my home too.

New Mexico☀️Land Of Enchantment