HSN, Inc. has reported results for its second quarter ended June 30, 2013, for its two operating segments, HSN and Cornerstone. Overall, HSNi’s net sales grew 5.9% over the prior year to $812.6 million.
HSN’s net sales increased 5% to $526.2 million while Cornerstone’s net sales increased 8% to $286.4 million. Both entities saw 10% growth in digital sales.
HSN sales grew in home design, household, electronics and apparel & accessories, offset by lower sales in jewelry and culinary, while the company noted that the net sales increase for Cornerstone was driven by sales growth in the home brands.
HSNi also repurchased approximately 0.9 million shares of its common stock at a cost of $49.8 million, or an average cost of $52.95 per share this quarter. From inception of the share repurchase program in September 2011 through July 31, 2013, HSNi repurchased a total of 8.4 million shares at an aggregate cost of $365.5 million, representing an average cost of $43.31 per share, the company stated. HSNi is authorized to purchase up to 10 million shares under the repurchase program authorized in September 2011.
“Our strong financial performance during the second quarter is a result of the uniqueness of our customer experiences, the power of our digital platforms and the quality of our brands and products,” said Mindy Grossman, CEO of HSN, Inc. “Sales for the quarter were up 6%, digital sales increased 10% and EPS grew 30%. In addition, we continued returning value to shareholders through our share repurchase and cash dividend programs.”
The company reported that adjusted EBITDA increased 7% to $85.2 million. This result was driven by a 6% increase in net sales offset by a 20 basis point decrease in gross margin and a 5% increase in operating expenses (excluding non-cash charges). Operating income increased 9% to $71.3 million. GAAP diluted EPS from continuing operations increased 30% to $0.79 per share compared to $.61 per share the year prior.
HSNi also noted that Cornerstone, which acquired Chasing Fireflies last year, operating expenses (excluding non-cash charges) increased 10% to $93.3 million largely due to an increase in selling and marketing costs, particularly catalog production and distribution costs, and reorganization costs, the company noted.