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QVC's 1Q Sales +2%, Operating Income +1%

Jewelry Sales Weaken in Key Regions

May 13, 2013 1:30 PM   By Jeff Miller
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RAPAPORT... QVC reported that revenue climbed 2 percent year on year to $1.97 billion during the first quarter that ended on March 31 and operating income rose 1 percent to $260 million. The shopping network's parent company, Liberty Interactive Corporation, recorded a revenue increase of 5 percent to $2.4 billion and net earnings were flat at $105 million.

QVC's U.S. revenue increased 5 percent to $1.3 billion in part due to stronger sales of  electronics and beauty products. The average selling price per unit increased 6 percent to $60.51, while the number of units sold declined 1 percent in the quarter.

Online sales jumped 13 percent to $544 million and this channel grew to account for 42 percent of U.S. revenue compared with 39 percent one year ago. QVC's international revenue fell 2 percent  to $677 million, but this was due in part to a stronger dollar against  the yen and pound. In constant currency rates, QVC's international revenue rose  4 percent.

In Japan, where QVC's revenue grew 3 percent in local currency,  returns as a percent of gross product revenue increased 97 basis points due primarily to higher return rates on jewelry, apparel and accessories. QVC Germany's revenue increased 1 percent in local currency, but jewelry sales declined and there were higher rates of returns for both  electronics and jewelry. QVC UK's revenue grew 1 percent in local currency, however, jewelry sales fell. QVC Italy's revenue increased 90 percent in local currency with robust sales of  the cooking and dining, beauty and apparel product categories. CNRS, QVC's joint venture in China, reported that revenue rose  39 percent in local currency.

''QVC's first quarter results were highlighted by strong revenue growth in the U.S. and solid international performance,'' said Mike George, QVC's president. ''We are seeing our customers embracing QVC as a destination that is centered around community, entertainment and relationships as much as it is around shopping.''

Greg Maffei, Liberty's president, added, ''QVC produced particularly strong results in the U.S., driven by solid operating performance and continued growth in ecommerce and mobile revenue. Our ecommerce companies showed marked improvement and returned to growth in adjusted OIBDA. We accelerated our repurchases of Liberty Interactive stock and bought $267 million worth of shares. Attributable to Liberty Ventures, post quarter close, we redeemed the 3.125 percent exchangeable debentures and issued new 30-year exchangeable debentures at an interest rate of 0.75 percent in a cash and tax neutral manner.''

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Tags: income, Jeff Miller, Jewelry, liberty interactive, QVC, revenue, sales
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