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St. Petersburg's HSN reports 20 percent drop in quarterly profits

ST. PETERSBURG — HSN Inc. Wednesday reported 20 percent drop in third quarter profits to $16.2 million, as its core online and home shopping business continued to drag.

The St. Petersburg-based company said it had a net income of 31 cents per share, a 7 percent decline from the same period the previous year. That missed Wall Street analysts' expectations of 40 cents per share.

The TV, digital and catalog retailing company posted revenues of $782.6 million, down 5 percent compared to the same quarter the year before. By the end of the year, rival QVC parent company Liberty Interactive Corp. is expected to finalize its 2.1 billion deal to purchase HSN.

PREVIOUS COVERAGE: New HSN president Mike Fitzharris brings decades of international expertise

The new owners recently selected Mike Fitzharris, a long-time QVC veteran with e-commerce experience in Europe and Japan, to take over as president of HSN. An October SEC filing outlined the future leadership structure of the combined company that showed the HSN's current triumvirate — Bill Brand, Rod Little and Judy Schmeling — being replaced.

The company cited higher operating expenses due to Hurricane Irma. During the September storm, the company closed its headquarters and relocated its broadcast studios and key personnel to temporary facilities outside of the storm's track. That cost HSN about $13 million in lost sales, the company said.

The company's flagship operation, HSN, posted a 27 percent drop in earnings.

One bright spot for parent company HSNi, however, was the smaller segment Cornerstone, a portfolio of e-commerce and catalog businesses like Ballard Design and Garnet Hill. Cornerstone, which has retail stores in Atlanta and Charlotte, reported a 40 percent increase in earnings.

Shares of HSN closed Wednesday at $35.65 down less than 1 percent.

Contact Tierra Smith at tsmith@ tampabay.com. Follow @bytierrasmith.

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