Liberty Interactive/QVC Q1 up 1%


Liberty-InteractiveLiberty Interactive grew QVC US revenue by 1% and adjusted OIBDA by 3% in Q1. QVC’s revenue increased 1% in the first quarter to $2.0 billion. During the same period, adjusted OIBDA increased 2% to $412 million and operating income remained flat at $260 million. QVC’s US operating income increased by 3%. revenue as a percent of total US revenue increased to 45%, a 327 bps increase. QVC US mobile penetration was 37% of orders. QVC’s US revenue increased 1% to $1.3 billion in the first quarter primarily as a result of strength in all categories except electronics. Average selling price per unit increased 1% from $60.51 to $60.89 and units sold increased 1% compared to the prior year first quarter.

In the quarter and into Q2, the company repurchased $224 million LINTA shares from 2/1 to 4/30.

Liberty Ventures Group reported strong Q1 results at TripAdvisor and increased  2014 revenue guidance to high 20%/low 30% range. EBITDA expected to grow at same percentage as total revenue.

“QVC expanded adjusted OIBDA margins in the US. On the international front, QVC posted very strong results in the UK, experienced rapid growth in its China joint venture, adding over 10 million homes in the quarter, and announced QVC France, with an expected launch in the summer of 2015. We continue to progress with the creation of the Liberty Digital Commerce Group tracking stock and expect to file the S-4 with the SEC shortly,” stated Greg Maffei, Liberty President and CEO. “And at Liberty Ventures, we filed the S-1 related to the Liberty TripAdvisor Holdings spin-off with the SEC on May 6th.”

Liberty Interactive Group’s revenue increased 1% to $2.4 billion in Q1, adjusted OIBDA declined 1% to $431 million and operating income decreased 6% to $244 million. The increase in revenue was due to favorable results at QVC. The decline in adjusted OIBDA was primarily due to unfavorable results at the eCommerce companies.

“We achieved solid first quarter results, with the U.S. market expanding profitability in the midst of a difficult retail environment,” said Mike George, President and CEO of QVC. “We attribute part of this to QVC’s high-quality, differentiated product offering and our ability to know what customers want, when they want it. We look forward to bringing this expertise, as well as our engaging multi platform shopping experience, to the French market.”

QVC’s international revenue in US Dollars increased 1% in the first quarter to $681 million. The first quarter results included the negative impact of the strengthening of the US Dollar against the Japanese Yen, which was somewhat offset by the weakening of the US Dollar against the Euro and the UK Pound Sterling. Adjusted OIBDA decreased 2% to $111 million and adjusted OIBDA margin decreased 39 basis points in the first quarter.

QVC’s outstanding bank and bond debt was $3.9 billion at March 31, 2014, an increase of $0.2 billion since December 31, 2013. On March 18, 2014, QVC issued $400 million principal amount of 3.125% Senior Secured Notes due 2019 at 99.828% and $600 million principal amount of 4.850% Senior Secured Notes due 2024 at 99.927%. The net proceeds from the offerings were used to repay indebtedness under QVC’s senior secured credit facility and for working capital and other general corporate purposes.

In the aggregate, Liberty Interactive Group’s eCommerce businesses’ revenue was flat at $461 million for the first quarter. Winter storm Pax, which occurred around Valentine’s Day, negatively affected operations at Provide Commerce’s businesses, including causing delivery issues. This contributed to the revenue weakness in the quarter. Additionally, and experienced low first quarter demand for their products. Adjusted OIBDA decreased 41% to $23 million.