As the company pursues its turnaround strategy, Qurate Retail missed analyst estimates for second-quarter sales and earnings, with adjusted profits falling into loss territory.
The company fell short of a Yahoo Finance-published analyst consensus estimate that called for net earnings of 11 cents and a $2.71 billion revenue estimate.
Net revenue was $2.65 billion versus $2.95 billion in the year-prior period while it came in at $2.54 billion versus $2.73 billion excluding results from the recently sold Zulily business. Operating income was $366 million versus $418 million in the year-earlier period, Qurate maintained.
Revenue at the QXH segment, including QVC and HSN operations was $1.62 billion versus $1.75 billion in the year-past period while QVC International came in at $606 million versus $638 billion and Cornerstone came in at $316 million versus $341 million, respectively. QXH’s operating income was down 16% to $303 million year over year in the quarter while that for QVC International slipped 12% to $71 million and that for Cornerstone slid 58% to $15 million.
“In this quarter, we made meaningful progress on Project Athens, our multi-year plan to transform the company, expanding gross margins in our video commerce businesses for the first time in over 18 months and materially improving our cash flow,” said David Rawlinson, Qurate Retail president and CEO, in announcing the financial results. “While our revenue was down, our topline results were in line with the discretionary retail industry, which was impacted by softer consumer sentiment and more promotional intensity, particularly in the home categories. During the quarter, we also divested Zulily, which simplified our portfolio and improved our go-forward liquidity. We finalized our insurance claims for the fire at our former Rocky Mount, NC fulfillment center and received $225 million of insurance proceeds. We continue our focus on cash flow, costs and margin growth in the near term and anticipate improved profitability in the second half of 2023. We believe we are on track to achieve our Project Athens objectives through 2024.”
