Qurate Progresses In Fourth Quarter

In a fourth quarter when the company continued its integration efforts including those combining HSN and QVC operations, Qurate Retail recorded lower net income but increased sales growth across most of its retail platforms. 

The company posted net income of $273 million, or 61 cents per share, versus $887 million or $2.05 per share, in the year-earlier period. Adjusted for one-time items, fourth quarter earnings were $277 million, or 62 cents per share, versus $266 million, or 62 cents per share, in the year-prior period. Qurate missed a MarketBeat-published analyst consensus estimate of 81 cents per share.

Total revenues in the fourth quarter increased 31% to $4.38 billion versus the year-earlier period, with QVC U.S. revenues up 3% to $2.09 billion, QVC International revenues down 3% to $766 million, HSN revenue down 1% to $707 million, Zulily revenue up 6% to $551 million and Cornerstone revenue down 4% to $271 million. E-commerce revenue was $2.7 billion or 62% of total revenue in the quarter.

Qurate total operating income in the quarter gained 18.2% from the year-prior period, with the metric down 6% at QVC U.S. to $346 million and down 20% at QVC International to $103 million. Zulily posted an operating loss of $2 million, down 89% from the $18 million operating loss in the year-previous quarter. Qurate didn’t provide year over year operating comparisons for HSN or Cornerstone, but HSN posted operating income of $12 million versus an operating loss of $3 million in the year-before period and Cornerstone posted an operating loss of $13 million versus an operating loss of $11 million in the year-past quarter.

In the full year, Qurate recorded net income of $674 million, or $1.45 per share, versus $1.21 billion, or $2.70 per share, in the year earlier. Adjusted net income was $867 million, or $1.86 per share, versus $807 million or $1.80 per share, in the year prior.

Full-year total revenues were $14.07 billion versus $10.4 billion compared to the year earlier. E-commerce revenue was $8.3 billion or 59% of total revenue for the year. Total operating income was $1.32 billion versus $1.04 billion in the year prior.

Mike George, Qurate Retail president and CEO, said, “In 2018, we made meaningful progress shaping the future of Qurate Retail, highlighted by the strongest new customer growth at QVC U.S. in its 33-year history and continued gains in digital and mobile engagement. Results for the year were led by top-line growth at QVC U.S. and International, excellent performance from Zulily, and significantly improved second-half results at HSN as we execute on its turnaround. Margin improvement is a top priority in 2019 as we step up the realization of integration synergies and seek to execute on initiatives to improve product margin and optimize our marketing investments.”