Qurate Retail Turns a Profit in Q3 Off Revenue Growth

Qurate Retail Inc. turned profitable in the third quarter of this year, reporting $352 million in net income for the three-month period ended Sept. 30, compared to a loss of $755 million in the year-ago period.

Adjusted net income rose to $238 million from $177 million a year ago.

Revenues rose 10 percent to $3.38 billion, versus $3.09 billion in the year-ago period. E-commerce revenue grew 15 percent to $2.1 billion or 62 percent of total revenue.

The company also reported a 24 percent increase in third-quarter adjusted operating income to $566 million. That compares to the $456 million in the year-ago quarter.

“Our performance was outstanding this quarter. We generated strong growth in revenue, OIBDA (operating income before depreciation and amortization), free cash flow and new customers, reflecting broad-based strength in home-related products,” said Mike George, president and chief executive officer of Qurate Retail.

“We are particularly pleased with our consolidated adjusted OIBDA up 24 percent and gains at all our business units. We believe our strategic priorities and continued investments in innovation position us well to sustain our momentum in the long term. Qurate Retail offers a unique blend of media assets, particularly our leadership in livestreaming, and retail core competencies centered on curating appealing merchandise and building loyal customer relationships through highly engaging content.”

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By division, QxH revenue increased 7 percent to $2 billion; QVC International revenue increased 11 percent to $723 million; Zulily revenue increased 10 percent to $395 million, and Cornerstone revenue increased 26 percent to $285 million.

The big loss in the third quarter of 2019 was due to Zulily incurring a $1 billion non-cash impairment charge related to its trade name and goodwill.

Citing innovations to improve performance, the company said more than 50 million homes were reached last quarter through its streaming service, primarily over Roku and Fire TV.

Last month Qurate launched on LG’s Shop Time app to 7 million users, providing the livestreams of Qurate’s two main networks, as well as on-demand programs, curated products, special deals and personality-led content.

Four months ago, the company began piloting an incentive tool that uses machine learning to inspire customers to purchase with personalized messages

“We continued to grow viewership on traditional TV in Q3, with total minutes watched up and the number of homes tuning in daily were up,” the company said.

The home category continued to dominate demand, the company said.

To date in 2020, Qurate said it has launched more than 1,000 new brands on QVC and HSN, up 30 percent from last year.

Like many other retailers, Qurate expanded and accelerated key events and promotional periods related to holiday selling. At the beginning of October, the company staged a Black Friday “countdown” at QVC and Black Friday “jump-start” at HSN, and both brands launched fully into gift programming with a holiday look and feel for the broadcast and digital platforms in mid-October.

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