HSN Sales, Income Decline In Challenging Q1Thursday May 5th, 2016 - 12:03PM | | | | | | | | | | |
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Both net sales and income declined for HSN in its first quarter, although the retailer beat analyst estimates as the company continues to grow its digital commerce platforms. In the first quarter, HSN recorded net income of $28.6 million, or 54 cents per diluted share, versus $33.7 million, or 63 cents per diluted share, in the period a year prior. Net sales decreased 3% to $816.8 million from $842 million in the previous first quarter. However, HSN did beat a Thomson Reuters analyst average estimate of 52 cents. HSN's segment net sales slipped 4% to $578.4 million. Sales gained in electronics, wellness and culinary but fell in other categories, the company reported. HSN attributed half of the net sales decline to the conclusion of a direct-response television marketing campaign during the current quarter. HSN digital sales increased 4% with penetration advancing 310 basis points to 43.8%. The return rate improved 90 basis points to 16.8% but the average pricepoint slid 5% primarily due to changes in product mix, HSN asserted. Operating income decreased 10% to $49.6 million. Cornerstone segment net sales decreased 1% to $238.4 million, with HSN attributing the decline to softness in apparel brands after catalog circulation was trimmed. Digital sales grew 2% with penetration gaining 190 basis points to 70%. Operating income decreased $1.9 million to $200,000. "Our performance in the quarter reflected the impact of the volatile retail environment combined with the repositioning of our product portfolio," said Mindy Grossman, CEO of HSN. "We continue to invest strategically in digital, data analytics and content while aggressively managing overall expenses in the business. Restoring top-line growth remains our top priority as we make progress in reenergizing certain merchandising categories and brands that we believe will build momentum at HSNi as the year progresses." She added, "Digital, now representing over half our sales, remains a key area of strategic focus and we continue to pursue opportunities to optimize our distributed commerce platforms. We are confident that as we accelerate our differentiated product pipeline, expand our content and reach and leverage new partnerships and platforms, we will be well positioned for long-term sustainable growth."
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Tags: hsn • sales • revenues • income • earnings • mindy grossman • first quarter • digital • e-commerce • television • home shopping network • Housewares • Retail • Financials •
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