Home Brightens Soft Q3 For QVC

As QVC launches a new beauty network, parent company Liberty Interactive’s QVC Group produced sales and income declines in the third quarter.

Liberty Interactive Corp., parent of QVC, reported third quarter financial results that included a decrease in net income from the QVC Group, from $154 million to $61 million and a retreat in adjusted net income from $203 million to $148 million in the period a year prior.

QVC U.S. operating income fell to $175 million from $214 million while that for QVC International slipped to $56 million from $66 million from the previous quarter. Revenue at QVC U.S. slid 6% to $1.34 billion while that for QVC International gained 4% to $610 million from the quarter a year earlier.

Although year over year comparisons were unavailable, as Liberty Interactive completed its acquisition in October of 2015, Zulily posted revenue of $359 million in the third quarter and an operating loss of $52 million. The Zulily loss was primarily the a result of approximately $60 million of amortization of intangible assets recognized in purchase accounting.

QVC Group’s consolidated revenue decreased 3% to $1.9 billion from the quarter year over year, but e-commerce revenue increased 2% to $882 million and grew to 45% of consolidated revenue from 43% in the period in 2015. Mobile orders were 59% of total e-commerce orders in the quarter, compared to 53% a year ago.

In the United States, QVC’s revenue decreased 6% to $1.3 billion during the third quarter as average selling price per unit slid 7% to $54.75 and units sold slipped 1%. The U.S. operation experienced declines in the electronics, beauty, jewelry and accessories categories partially offset by gains in home and apparel. E-commerce revenue gained 1% to $684 million and grew to 51% of total U.S. revenue.

“QVC did well internationally and just launched Beauty iQ, a new multiplatform network dedicated to beauty, while Zulily again posted impressive results,” said Greg Maffei, Liberty Interactive president and CEO.

QVC president and CEO Mike George, said, “We are benefiting from our diversified global model. While we are facing sales pressures in our U.S. business, we delivered local currency sales gains in every non-U.S. market in the quarter. We are responding to the immediate domestic challenges through a series of strategies to drive more balanced growth across our categories, consistently deliver exceptional customer experiences, offer outstanding values, accelerate new customer acquisition, and lower operating costs. These actions demonstrate our confidence in the long-term health of our unique retail model.”