Liberty Interactive Corp., the parent company behind home shopping network QVC, recently posted a 16 percent decline in profit in the fourth quarter of 2016 — the latest in a series of declines in the home shopping space as eCommerce rises.
“Internationally, QVC continues to perform well, while domestically we are focusing on strengthening a few merchandise categories that have been weak,” said Greg Maffei, Liberty Interactive president and CEO, in the earnings release. “Zulily finished the year strong, and we took advantage of the stock pullback to repurchase $255 million of QVCA shares.”
Liberty Interactive reported a profit of $188 million for the quarter, down from $223 million from the same period in 2015. Revenue was helped a bit by flash-sale site Zulily, which QVC acquired back in 2015 — revenue for the quarter fell 3.1 percent to $3.13 billion, below the average analyst expectations of $3.22 billion.
In the past, George has attributed QVC’s sales drop to a number of factors, including an increased number of department store promotions last summer, round-the-clock election coverage and the Summer Olympics competing for viewer attention, and problems with specific brands.
Domestic revenue for QVC was down 6.8 percent to $1.95 billion in Q4, while international revenue remained flat at $711 million. Meanwhile, Zulily’s revenue rose 10 percent.
“Our international segment generated strong results in the quarter with broad-based sales gains and margin expansion,” said QVC president and CEO Mike George in the earnings release. “The sales trend in our U.S. business persisted from the third quarter primarily due to continued headwinds in select categories. We have strong action plans in place and are confident in our ability to return the U.S. business to growth.”
For the full year, QVC Group’s revenue increased 11 percent to $10.2 billion — Zulily revenue alone grew 14 percent to $1.5 billion — while operating income decreased 14 percent to $1.0 billion and net income decreased 26 percent to $473 million.