The third quarter was difficult for Qurate Retail, but the company’s transformation plan is approaching the culmination of an effort to improve internal operation and shifting to initiatives that apply resources to expanding the business on streaming services and social media.
Net loss attributable to Qurate shareholders was $23 million versus net earnings of $1 million in the year-previous quarter, the company stated.
Qurate did not break out per-share loss and earnings figures. Qurate share price was below permissible levels on the NASDAQ exchange. As a result the company may change how it lists on the exchange and, if necessary, execute a reverse stock split to effect compliance with NASDAQ rules, Qurate noted in a conference call.
Revenue in the quarter came in at $2.34 billion versus $2.48 billion in the year-earlier period. Operating income was $152 million versus $151 million in the year-prior quarter.
By business segment, QxH, including QVC and HSN operations, post revenues of $1.52 billion versus $1.62 billion in the year-past quarter as sales slipped to $571 million from $577 million at QVC International and to $252 million from $285 million at Cornerstone. QxH operating income was $107 million versus $91 million in the year-before quarter while QVC International came in at $57 million versus $63 million and Cornerstone came in at a loss of $2 million versus operating income of $4 million.
In the conference call, David Rawlinson, Qurate president and CEO (pictured above), said outside factors during the quarter, including the national election and hurricanes, depressed viewership of Qurate v-tail programming, which led to lower unit sales volumes. Customer count at QxH fell in the quarter. Consumers continued to be “selective” in their discretionary spending, although they did respond better to seasonal promotions in certain categories including home decor, Qurate noted.
The presentation that accompanied the conference call had home merchandise sales at the QxH division down 3% in the quarter year over year. However, as a percentage of sales, home increased to 40% from 39% in the third quarter of 2023.
Rawlinson, in announcing the financial results, maintained, “While the third quarter was anticipated to be the most difficult quarter of 2024, current headline events and the challenging macroeconomic climate heavily impacted viewership of our programming and consumer behavior more than expected. As a result, revenue underperformed this quarter and resulted in meaningful bottom-line deleverage. Despite this, we were able to hold consolidated gross margin flat with disciplined cost management and reduced operating expenses. We also continued our proactive balance sheet management, completing an offer in which 89% of QVC’s 2027 and 2028 notes were tendered, which improves the QVC credit profile with reduced debt and an extended maturity profile. We are nearing the end of our multi-year Project Athens initiative focused on margin and free cash flow. The team has materially improved the business, becoming a more profitable, leaner and more nimble organization. We are transitioning to the next phase of our strategic growth as we enhance our capabilities to reach aggregated audiences on primarily social and streaming platforms.”
