Second quarter company-wide sales at HSN were down 4% as the home shopping retailer pinned the decline on a weaker selling season and greater promotional activity with its outdoor products business.
Total sales for the three months ended June 30 were $854.3 million, down from sales of $885.6 million for the same quarter the previous year. Operating income was $55.1 million up 3% from the second quarter of 2015.
On a segment basis, sales for HSN were $557.2 million, down 3% from the previous year, while sales at Cornerstone were $297.1 million, down 5% year-over-year.
“Recognizing that we are navigating in a challenging macro environment, we are focused on execution, combined with disciplined operating expense management and optimizing operational efficiencies,” said Mindy Grossman, CEO of HSN, Inc. “We are accelerating our targeted customer acquisition strategies and intensifying our efforts to drive product demand through proprietary products, new programming and partnerships to improve our top-line performance.”
She noted that within the company’s Cornerstone division, the company moving forward is concentrating on brands within the portfolio that have the greatest opportunity for growth. As a result, the company is looking to sell its TravelSmith and Chasing Fireflies apparel businesses.
In addition, the company has named Judy Schmeling, currently COO and CFO of HSNi, as president of Cornerstone Brands. In addition to her new role, she will continue to serve as COO of HSNi and will remain CFO during the transition until a permanent successor is appointed.
Within the HSN segment, sales were up in electronics and beauty, which were offset by decreases in other product categories. Approximately one-third of the decline in net sales was attributable to the conclusion of a direct-response television marketing campaign in the prior quarter. Digital sales grew 5% with penetration increasing 43.6% of total sales.
Cornerstone’s net sales were down primarily due to weakness in the outdoor category within the home brands and lower catalog circulation, which decreased 6%, the company said.
