Q Talk

[Spurt]

There was another thread discussing how HSN's CEO, Mindy Grossman will be leaving HSN 5/24/2017 to take an exective position with Weight Watchers...........Here is financial results for HSN for the first quarter 2017

HSN, INC. REPORTS FIRST QUARTER 2017 RESULTS

HSNi Results for the First Quarter 2017:

• Net sales decreased 4%; excluding the impact of the divested businesses and leap year, net sales decreased 1%
• Digital sales grew 3% excluding the divestitures; digital penetration increased 200 basis points to 54%

• HSNi's net sales decreased 4% to $785.4 million.  Excluding the results of TravelSmith and Chasing Fireflies, two Cornerstone brands divested in September 2016, and an additional day for leap year within the HSN segment, HSNi's net sales decreased 1%.  HSNi's digital sales penetration increased 200 basis points to 53.8%.
  
  
• HSNi's operating income decreased 23% to $38.6 million.
  
  
• Net income was $21.2 million compared to $28.6 million in the prior year.
  

  HSN's net sales were $560.5 million, a decrease of 3% from the prior year.   Excluding the benefit of having an additional day for leap year in the first quarter of 2016, HSN's net sales decreased 2%.  Digital sales grew 3% with penetration increasing 290 basis points to 46.7%.  Sales grew in apparel & accessories, kitchen and home, offset by decreases in other product categories.  Shipping revenues declined primarily due to the August 2016  changes in the standard shipping rates and increased promotions.  Average price point increased 4% largely due to changes in product mix. Units shipped decreased 8%.

  Gross profit decreased 4% to $191.1 million.  Gross profit rate decreased 40 basis points to 34.1% primarily due to a decrease in shipping revenues and higher fulfillment costs, partially offset by an increase in product margins.  The increase in fulfillment costs was primarily the result of the ongoing implementation of HSNi's supply chain optimization which, among other things, includes expanding the automation capabilities in its Piney Flats, Tennessee distribution center

• Operating expenses increased 3% to $153.6 million driven by higher costs incurred from the supply chain optimization and an increase in bad debt expense.  Excluding non-cash charges, operating expenses increased 3% and were 25.4% as a percentage of net sales compared to 24.0% in the prior year.

  Operating income decreased $12.1 million, or 24%, to $37.5 million.  Adjusted EBITDA decreased $12.1 million,  or 20%, to $48.6 million.  HSN's supply chain optimization implementation resulted in an additional $4.0 million of costs in the first quarter of 2017 which impacted gross profit and operating expenses.

• On April 26, 2017, the Company announced that Mindy Grossman had resigned as chief executive officer effective May 24, 2017.  Until a successor is named, the board of directors has established the Office of the Chief Executive consisting of Rod Little, Chief Financial Officer; Bill Brand, Chief Marketing Officer of HSNi and President of HSN; and Judy Schmeling, Chief Operating Officer of HSNi and President of Cornerstone Brands, Inc.

"We continue to focus on stabilization and ultimately growth regeneration in the business. The continued strength of digital sales, and mobile sales in particular, has been very encouraging. Digital sales, which now account for over half of our revenue, continued to grow both in absolute terms and as a proportion of total revenue.  Mobile, which we see as our flagship, continues to be our fastest growing sales channel and significant source of new customer acquisition," said Rod Little, Chief Financial Officer, HSNi.

"We remain committed to our strategies to improve our performance.  Our key priorities are:  acquiring and retaining customers via a robust and relevant product portfolio, optimizing our digital platforms, and improving our supply chain capabilities and efficiency, all to drive consistent shareholder value creation," added Mr. Little.   "As we look to celebrate our 40th anniversary this summer, we thank Mindy Grossman for her vision, inspiration and leadership over the past decade."

http://www.hsni.com/releasedetail.cfm?ReleaseID=1024207