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Dive Brief:
QVC Group on Wednesday reported a 10% year-over-year revenue drop in Q1. Its net loss reached $91 million, compared to a net income of $8 million in the year-ago quarter.
The company, which has until June to regain compliance with Nasdaq, will begin a reverse stock split if it gains approval during a shareholder meeting on Monday.
“Our consumer remains heavily distracted by current events,” CEO David Rawlinson said, remarking revenue on declines during a quarterly earnings call with analysts.
Dive Insight:
QVC Group’s quarter was marked by a decline in linear TV viewership, weakening customer sentiment and a volatile news cycle, Rawlinson said.
That, as of late, includes worry over tariffs.
China is the company’s largest source for imports. QVC Group has reduced its sourcing from the country to under 50%, down from over 55% five years ago. It is working to shift sourcing to other countries, targeting a source mix where no single country has more than one-third of its sourced goods by the end of the year.
”Our teams have a number of mitigation strategies underway including sourcing diversification, limiting purchase orders, vendor negotiations and may include pricing price changes,” CFO Bill Wafford said. “If tariffs persist at the current elevated levels, it is our expectation the market will likely see lower consumer demand particularly in discretionary retail.”
Meanwhile, Cornerstone, which is comprised of four brands including Garnet Hill and Frontgate, was down 13% for the quarter, which the company attributed to ongoing “housing market stagnation.” Earlier in May, Cornerstone’s president, Ryan McKelvey, announced his retirement. QVC Group is searching for a new president, and in the interim Tom Bazzone, president of Frontgate, is stepping into the role.
QVC Group is currently working to become a live social shopping company. In April, the company announced an agreement with TikTok to host 24/7 live shopping streams that feature its brands, products and talent.
The company shuttered its headquarters in Florida as part of a broader move to consolidate its QVC U.S. and HSN operations and moved its brand operations to West Chester, Pennsylvania. Earlier this spring the company laid off 900 employees as part of a reorganization.
QVC Group, which recently changed its name from Qurate Retail Group, said it intends to develop streaming commerce options across YouTube TV, Hulu and Netflix, as well as tailor its content for TikTok, Facebook and other platforms.