Sales at HSN improved in the first quarter, but a deep sales drop at the e-commerce company's mail order catalog unit continued to take its toll.
Overall, the St. Petersburg retailer's profits dropped 68 percent to $3 million, or 5 cents a share, and sales declined 7 percent compared with a year ago. But, despite the recession, HSN's TV unit's sales improved since the holidays to a 0.8 percent year-to-year decline. And some fixes at the long-suffering Cornerstone catalogs unit showed signs of gaining traction despite a 22 percent sales drop.
"Our business has stabilized," said chief executive officer Mindy Grossman, who shifted airtime from fashion and jewelry that was not selling to fitness, electronics and beauty products that are. Still, she is cautious about building up HSN inventory, which was just cut by $62 million, ahead of consumer demand.
Sales at the TV network unit were $474 million for the quarter ended March 31, down from $479 million in what had been regarded a good quarter a year ago. Customer count and the number of units sold increased as profit margins tightened. Network sales online grew to 30 percent of the company's business for the first time.
By contrast, rival ShopNBC reported first-quarter sales were down 34 percent. QVC, which has suffered deeper sales declines than HSN most of the past year, reports its first-quarter results today.
Among the winning product lines during the first quarter were Malibu Pilates, Pilates Power Gym and Andrew Lessman, the nutritional supplements sales guru, who had his best first quarter in 13 years on HSN.
Grossman, who ordered a 30 percent cutback in catalog distribution, said the worst performers were outdoor patio products and luxury home furnishings.
In the current quarter, some big sellers defying the recession are tennis star Serena Williams' jewelry and apparel from Stephanie Greenfield of Scoop fashions fame. The network has big hopes for Paula Abdul's jewelry and accessories, which airs in a live remote from Hollywood later this month in connection with American Idol.
Mark Albright can be reached at firstname.lastname@example.org or (727) 893-8252.