HSNi net sales climb 10% as Cornerstone, HSN strengthen
November 3, 2010,
St. Petersburg, Fla. - Sales grew but profits fell at HSNI during its third quarter.
Net income fell 10% to $14.9 million. Sales for the period ended Sept. 30 rose 10% to $708.4 million.
By segment, sales increases in the quarter were strongest at Cornerstone, up 23% to $214.7 million - "the largest year-over-year growth rate of any quarter since 2005," said Mindy Grossman, HSNi ceo. Internet sales represented 56.9% of sales.
"We undertook key strategic initiatives this quarter that were focused on customer engagement by creating content-immersive experiences and leveraging our unique multichannel platform," she explained.
Cornestone's sales growth was attributable, the company said, to "an increase in demand for luxury and outdoor products, the execution of strategic merchandising and marketing initiatives and an investment in catalog circulation in Cornerstone's three largest brands -- Frontgate, Ballard Designs and Garnet Hill."
The return rate increased to 15.9% from 14.2% primarily due to a $2.5 million sales provision recorded for the voluntary product recall.
Sales also increased at HSN but more modestly - by 6% - to $493.7 million, including a 10% sales growth at HSN.com, representing 30.9% of HSN's net sales, up from 29.8% in the prior year. Units shipped and average price point increased 3% and 2%, respectively. Also during the quarter, HSN also enjoyed "best customer growth" of 9%, due primarily to strength in apparel, accessories and electronics as well as the addition of new brand partners and marketing initiatives, Grossman said.
Year-to-date, net income soared by 73% to $57.236 million on a 9% sales increase to $2.08 billion.