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Home a Driver for HSNi, HSN and Cornerstone in Q1

ST. PETERSBURG, FLA. - Home goods proved an important component of sales in the first quarter for HSN Inc., and within its two divisions, HSN and Cornerstone - especially for the latter, which experienced double-digit growth.
     Total company sales for the quarter, which ended March 31, grew 5% over the prior year to $772.7 million.
     HSN's sales increased 2% to $550.1 million. That included 4% growth in digital sales, with penetration increasing 80 basis points to 35.7%.
     Sales for Cornerstone jumped 14% to $222.5 million, including 19% growth in digital sales, with penetration increasing 300 basis points to 66.8%.
     "Every Cornerstone brand had a noticeable increase in digital penetration, and the home segment drove Cornerstone's overall performance, led by Ballard Designs, Grandin Road, and Front gate. The addition of Chasing Fireflies to the portfolio also contributed to the sales increase," HSN ievp and cfo Judy Schmeling told analysts during the company's conference call earlier this month.
     HSN also experienced "considerable growth" during the quarter in its apparel and accessories, beauty, and home design categories. But increases were offset by lower sales in jewelry and electronics. HSN's average price point decreased 9%, but the units shipped increased 12% and the return rate increased 70 basis points to 20.0% primarily due to changes in product mix.
     Other results in the quarter included:
     • HSNi operating income up 2% to $52.5 million, and diluted earnings per share from continuing operations up 24% to 56 cents compared to45 cents in the prior year.
     • HSN operating income increase of 2% to $48.6 million compared to $47.5 million in the prior year.
     • Cornerstone operating income, which was positively impacted by a decrease in stock based compensation expense, increased by 2% to $3.9 million.

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