The comeback of HSN Inc. has gone on long enough, and strong enough, for the $3 billion St. Petersburg TV e-commerce retailer to weigh making its first acquisitions in five years.
The network has said little about its intentions since putting a former Wall Street investment banker on the full-time payroll last month. But with $344 million in cash, the company is revisiting where to start pouring profits, including share repurchases, dividends or buying complementary businesses.
Network executives on Wednesday told analysts their interest lies in acquisitions that bolster their core TV shopping network and possibly rebuild its once extensive international operation that was abandoned a decade ago.
"We've evaluated several acquisitions, but so far none of them made sense," said Mindy Grossman, chief executive officer who steered the network through rocky times including a fragile initial public offering weeks before the stock market and consumer spending collapses of 2008.
News that the company is looking at acquisitions is one more sign of how Grossman plans to grow what's now a healthy business. Her moves have established HSN's fashion credibility with designers and customers. She tried first-ever promotional deals with celebrities ranging from Mariah Carey to Sean Combs, film studios and most recently packaged goods makers like Kraft Foods.
Meantime, HSN's stock price Monday hit a 52-week high of $35.43 a share. It closed Wednesday at $34.69, up 51 cents. Wall Street values the company at more than $2 billion, four times what it traded for in 2008.
Securities analysts with Piper Jaffray estimate HSN earnings will grow 15 to 20 percent annually "for the foreseeable future." That's enough to support a target stock price of $45.
Grossman's comments came as HSN reported a 14 percent increase in profits and 6 percent increase in sales during the quarter ended March 31.
Net income increased to $20 million, or 34 cents a share, up from $18 million, or 30 cents a share, a year ago. Revenue hit $724 million, up from $683 million. The company's sales increase was driven by a 20 percent improvement at the Cornerstone catalog unit while sales at the TV shopping network rose 1 percent.
Mark Albright can be reached at email@example.com or (727) 893-8252.