Last week Qurate Retail Group, the parent of both QVC and HSN, reported that revenue for the two channels dropped 4% in the fourth quarter and 5% last year.
The two dominant home shopping networks are part of Qurate’s QxH division. Revenue in the fourth quarter was $2.16 billion.
Here’s what Qurate said in its press release about QVC and HSN:
QxH revenue declined in the fourth quarter and full year. Revenue declined in both periods primarily due to lower units shipped, which decreased 5% in the fourth quarter and 6% in the full year, as well as lower shipping and handling revenue and higher returns.
Units shipped in the fourth quarter were impacted by less inventory liquidation sales compared to the prior year. These factors were partially offset by a 3% increase in average selling price in both the fourth quarter and full year. QxH grew apparel and jewelry with declines in electronics and home in the fourth quarter. QxH reported declines in all categories for the full year.
Operating loss in the fourth quarter was primarily driven by a $326 million non-cash impairment charge related to goodwill. For the full year, operating income increased due to the $2.7 billion non-cash impairment charge related to goodwill and the HSN tradename recorded in the prior year.
For the fourth quarter and full year 2023, Adjusted OIBDA margin(4) increased mainly due to higher product margins, lower fulfillment (warehouse and freight) costs and favorable inventory obsolescence expense.
Product margins increased primarily due to mix shift to higher-margin products, fewer clearance items as a result of improved inventory health and initiatives to increase initial margin. Fulfillment favorability was driven by efficiencies from Project Athens initiatives, significantly lower detention and demurrage costs and improved freight rates from the new parcel carrier contract that took effect in July 2023. Inventory obsolescence declined due to an improved inventory assortment. These gains were partially offset by unfavorable administrative expenses in both periods, with expenses for the full year primarily related to outside services for Project Athens.
And here is what the top honcho had to say:
“2023 was a transformational year for Qurate Retail,” David Rawlinson, President and CEO of Qurate, said in a statement. “We executed better on multiple fronts including merchandising, pricing strategy and inventory management, and these efforts yielded significant, positive results in the operational health and financial performance of the business. We increased free cash flow generation, reduced substantial debt and optimized our portfolio with the divesture of Zulily, and in the fourth quarter, we grew Adjusted OIBDA by over 70% as reported. As we enter 2024, we expect to continue our momentum and drive improved results.”
Here is the slide presentation that Qurate had for its investors:
https://d1io3yog0oux5.cloudfront.net/_efda8a953d44e23d2aaf22d86081bbd7/qurateretail/db/880/8068/earnings_presentation/QRTE+Q4-23+Earnings+Slides_v2.pdf