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Respected Contributor
Posts: 2,429
Registered: ‎07-12-2010

Qurate Releases Q4 and Year-End 2019 Reports

[ Edited ]

QVC and HSN revenue down 3% in Quarter 4 2019 compared to Quarter 4 2018. Down 3% in 2019 compared to 2018. All categories down in Q4. All categories but electronics down in 2019. Zulily down 18% in Q4 2019, down 14% in 2019.

 

Press Release 

 

QxH

In the fourth quarter, QxH reported revenue declines in all categories. For the full year, QxH realized declines in all categories except Electronics. Operating income declined in the fourth quarter and full year primarily due to an increase in impairment charges at HSN, partially offset by the absence of transaction-related expenses incurred in 2018. Operating income included non-cash impairment charges related to the fair value of HSN’s tradename of $147 million in the fourth quarter of 2019 and $30 million in the fourth quarter of 2018.

For the quarter and full year, adjusted OIBDA margin(3) contracted primarily due to cost of sales pressure, which included higher fulfillment (freight and warehouse) expenses related to the network optimization plan and general freight rate increases as well as inventory management including costs associated with the exit from Ingenious Designs. For the full year, these headwinds were partially offset by a favorable product mix impact. Adjusted OIBDA margin benefited in the fourth quarter and full year from TV distribution commissions, which were partially offset by higher marketing expenses. The fourth quarter also benefited from lower incentive compensation. Lower TV distribution commissions were in part associated with the accounting treatment for certain renewed HSN carriage agreements (described below), as well as favorable renegotiated rates at HSN.

Beginning in the third quarter of 2018, HSN began renewing TV carriage agreements with certain distribution partners, which provided multi-year upfront payments that are amortized over the life of the agreements, versus its previous convention of expensing quarterly payments as incurred. In the quarter and full year, this accounting change had a positive impact on QxH’s adjusted OIBDA(3) with a corresponding increase in QxH’s amortization expense, which is neutral to operating income each period and cash neutral over the life of the agreements.

 

Presentation 

 

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Esteemed Contributor
Posts: 6,120
Registered: ‎03-29-2019

Re: Qurate Releases Q4 and Year-End 2019 Reports

[ Edited ]

And now there will be those who will be doing a jig of glee, and gloat, and be smug and happy that their sales are down.

 

They'll say, "See? I told you so!"

 

 

In other words, they'll feel superior knowing that sales are down, glad, even.

 

 

Why?

 

 

Because they hate the Q, and want to see it suffer, and go out of business, even, not caring that that would mean that people would loose their jobs.

 

As long as the Q suffers, that's all that's important.

The Sky looks different when you have someone you love up there.
Esteemed Contributor
Posts: 7,097
Registered: ‎09-05-2014

Re: Qurate Releases Q4 and Year-End 2019 Reports

I'll go first.  I predicted that sales would be down when they eliminated the 24/7 broadcasting.  However, their overall financial performance isn't that terrible, given that operating expenses also dropped.  It's not all about the sales.

Honored Contributor
Posts: 12,944
Registered: ‎10-09-2012

Re: Qurate Releases Q4 and Year-End 2019 Reports

 

Here are some of the highlights I plucked out of Qurate's investor call this morning: 

 

1.  It was mentioned more than once that the coronavirus closed manufacturing sites and Zulily was highly impacted because they keep minimal items in any of their own warehousing  facilities.  Factories in China were closing as far back as Q4 2019.  But they have just started opening up again.  [I don't know...

Zuliliy is bleeding Qurate dry.  How long will they keep it going?]

 

2.  For QVC/HSN: Slowdown in all Categories in Q4, and all except Electronics, in all of 2019.  According to the investor call, products like iRoomba is a great revenue generator, and offset even higher electronics losses. 

 

2.  Fashion results are soft. Well established fashion brands showed a slow-down, and new brands haven't generated sales quickly enough.

 

3.  Jewelry industry is still soft.  Going forward, QVC & HSN will concentrate most jewelry on-air time to major jewelry event days.   

 

4.  Well established Beauty brands showed a slow-down, except Belle Beauty, Beekman, and Lancer

 

Some positives for QVC/HSN reported on the call:

 

*  More sizes in 4X and 5X, and some new brands specifically made for those sizes.

 

*  Three new additional proprietary athletic brands.

 

*  IMAN coming back to HSN.

 

Overall, the call went just as I expected, not good.  But I do hope all of Qurate's optimism about strategies already in the works to improve things will truly come to fruition.  I hope to see QVC & HSN around in some form or fashion for a long time!

Valued Contributor
Posts: 799
Registered: ‎03-14-2010

Re: Qurate Releases Q4 and Year-End 2019 Reports

They need to restructure both HSN/QVC. Instead of appealing to millennials, which isn't working, they need to try appealing to 50+. I only shop HSN when they offer free shipping and coupons. Don't shop the Q at all. Most people leaving are their long time customers. Maybe they should drop the circus atmosphere and keep hosts like Mary Nelson and Katie who appealed to 50+. If they keep on the way they are going pretty soon there will be no more Q/ HSN. No one wants to see that happen, but it seems to be a fact.
Honored Contributor
Posts: 8,074
Registered: ‎10-03-2014

Re: Qurate Releases Q4 and Year-End 2019 Reports

I'd like to see individual results from QVC and HSN rather than combined.  I couldn't find them, so they might not be reported anymore.  

 

If I recall correctly, QVC was up slightly for 2018, HSN down around 6%, so if results are similar for 2019, QVC could have performed better than HSN again this year.  

 

I expected more than a 3% decline.  I don't think this is so bad.

 

I do think it interesting that all categories declined in the fourth quarter.  All but electronics for the year.  We have been experiencing a good economy.  Could that decline mean QxH's lack of competitiveness...product lines, policies, and shipping problems were the causes?

Esteemed Contributor
Posts: 7,097
Registered: ‎09-05-2014

Re: Qurate Releases Q4 and Year-End 2019 Reports

They've stated that they will no longer report QVC and HSN results separately, but will combine them as QxH.

Trusted Contributor
Posts: 1,471
Registered: ‎10-10-2019

Re: Qurate Releases Q4 and Year-End 2019 Reports

 

 

The majority of us do not hate "the Q". We dislike what has happened to a company we once enjoyed shopping and watching. We want QVC to become once again the company Joseph Segel meant it to be. The QVC initials have a meaning. The company needs to do what has to be done. Restructure. The management in place now are making too many bad decisions. Get some new vendors with better quality, change the way presentations are done in a more professional manner concentrating on the item being sold, fix the IT problems, etc.

 

Make QVC what it used to stand for:

 

Quality ......... Value ......... Convenience

Valued Contributor
Posts: 799
Registered: ‎03-14-2010

Re: Qurate Releases Q4 and Year-End 2019 Reports

Very good post, Sheila!
Regular Contributor
Posts: 236
Registered: ‎02-14-2017

Re: Qurate Releases Q4 and Year-End 2019 Reports

Every once in a while I'll see QVC shows from years past on say YouTube, and the decrease in quality of the broadcasts since is astonishing.  The presenters had fun without being over-the-top with their nonsense, the products seemed a bit more interesting, etc.  My viewership and purchases have gone down significantly over the last couple of years.