As it continues to adjust its business model after the QVC and HSN merger, Qurate Retail struggled in a challenging first quarter.
For the quarter ended March 31, Qurate Retail posted net earnings of $55 million, or 13 cents per diluted share, versus $384 million, or 30 cents per diluted share, in the year-prior period.
Adjusted for one-time charges, net income was $204 million, or 42 cents per diluted share, versus $151 million, or 35 cents per diluted share, in the year-earlier quarter. Adjusted diluted earnings per share fell two cents short of a MarketBeat-published analyst average estimate.
First quarter revenue was $3.09 billion versus $3.23 billion in the previous first quarter. Operating income slipped to $288 million from $294 million in the year-previous quarter.
For the QxH division, which consists of QVC U.S. and HSN operations, revenue slipped 4% to $1.86 billion while operating income fell 7% to $247 million for the quarter year over year. In the timeframe, QVC International revenue fell 5% to $644 million and operating income fell 11% to $79 million, Zulily revenue fell 5% to $397 million but operating loss decreased 54% to $13 million, and Cornerstore revenue fell 10% to $187 million while operating loss fell 22% to $7 million.
“Our first quarter performance was disappointing amidst a changing retail and media landscape,” said Mike George, Qurate Retail president and CEO. “Our recent results have been more variable as we navigate the evolution of our business model and the integration of HSN, fine-tune our investments, and strike the right balance between sensible revenue growth, margin expansion, new customer acquisition and our strategic initiatives. We are taking a disciplined approach, investing in initiatives to drive high-quality customer growth and engagement, broaden and deliver our assortments, particularly across new digital platforms, and optimize our fulfillment network. Our customer fundamentals remain strong, including customer count, retention and purchase frequency. We are confident we are taking the right actions to deliver attractive operating margins and free cash flow for the long-term.”