Revenues and operating income fell at QVC and HSN in the fourth quarter, which impacted Qurate Retail financial results, although the company made some adjusted income headway.
For the fourth quarter, Qurate posted net income of $141 million, or 34 cents per share, versus $273 million, or 61 cents per share, in the year-previous quarter. Adjusted net income was $284 million, or 68 cents per share, versus $277 million, or 62 cents per share, in the year-before period. Qurate matched a MarketBeat-published analyst consensus estimate of 68 cents per share.
Total Qurate retail revenue was $4.17 billion versus $4.38 billion in the year-past quarter while operating income was $287 million versus $435 million in the year-earlier period.
At QxH, including the QVC and HSN operations in the U.S., revenue dropped 3% in the quarter to $2.69 billion and operating income dropped 47% to $191 million. In the period, QxH incurred revenue declines in all categories. For the full year, QxH suffered 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.
At Zulily, fourth quarter revenues fell 18% to $452 million and operating loss gained 550% to $13 million, Qurate indicated. Revenue slid for the full year as well, declining 14% to $1.57 billion, primarily resulting from lower unit volume. Zulily’s operating loss for the full year, up from $95 million to $1.09 billion, resulted primarily from a $1 billion non-cash impairment charge related to its trade name and goodwill, which was incurred in the 2019 third quarter.
At Cornerstone, revenue fell 6% to $254 million and operating income improved by 123% to $3 million, Qurate maintained. Results incorporate contributions from the Improvements catalog business until it was shut down effective December 2018. Operating income improved primarily due to gross margin expansion in the home brands as well as lower marketing expense.
For the full fiscal year, Qurate posted a loss of $456 million, or $1.08 per share, versus net income of $674 million, or $1.45 per share, in the year previous. Adjusted net income was $818 million, or $1.93 per share, versus $867 million, or $1.86 per share in the year before.
Total Qurate retail revenue was $13.46 billion versus $14.07 billion in the year past while operating income was $184 million versus $1.32 billion in the year earlier.
“Our fourth quarter results were in line with full-year trends, notably we experienced pressure on revenue and margins from the investment in network optimization at QxH,” said Mike George, Qurate Retail president and CEO. “Despite these challenges, we were encouraged with our ability to grow free cash flow in 2019 on an operating basis. We are accelerating the execution of our strategic priorities as we work to return to profitable growth. We continue to lead the curation of special products at compelling values across multiple platforms, providing customers an important third way to shop.”