HSNi boosts digital sales, customer count in Q4
Retail Editor 4 -- Home Textiles Today, February 21, 2014
St. Petersburg, Fla. - Strength in home-related products sales drove sales for multi-channel retailer HSNi's Cornerstone brand during the fourth quarter, when the company also made headway in digital sales and new customer acquisition.
Judy Schmeling, coo and cfo, said the "number of strategic actions [we took] in 2013 to position the company for long-term growth" started paying off in the fourth quarter.
These included record-high customer levels for HSN and Cornerstone and mobile growth of 59%.
Added Mindy Grossman, ceo and director of HSNi: "Mobile sales now represent 14% of our total business."
For the fourth quarter, ended Dec. 31, HSNi reported a 7% in adjusted non-GAAP net income to $59.9 million compared to $56.0 million. Diluted earnings per share from continuing operations increased 14% to $1.14 compared to $1.00 in the prior year. Adjusted EPS, (which the company noted excludes a net expense reduction in the fourth quarter of 2013 from fair value adjustments related to an acquisition in 2012) increased 11% to $1.11 compared to $1.00 in the prior year.
Net sales for HSNi grew 4% over the prior year to $1.0 billion. By segment, HSN's net sales increased 2% to $697.4 million, including 7% growth in digital sales; and Cornerstone's net sales grew a stronger 8% to $322.4 million, including 9% growth in digital sales.
Other highlights HSNi reported for the quarter included: a 2% increase in average price point to $63.63 compared to $62.22; and a digital sales penetration increase to 48.9%, up 200 basis points from the year ago's 46.9%.
At Cornerstone, sales were up 8% to $322 million, with digital sales growing 9%. Strong performances by home, in particular indoor and outdoor furnishings as well as seasonal décor, were led by the segment's Frontgate and Grandin Road brands.
HSN's sales were up 2%, and for the first time in two years the segment reported an increase in its average selling price, although the number of units shipped was flat. HSN reached five million active customers, and digital sales now account for 40% of its total sales.
For the full fiscal year, HSNi's adjusted non-GAAP net income rose by 13% to $173.0 million versus $153.0 million.The year's diluted EPS from continuing operations increased 38% to $3.25 compared to $2.36 in the prior year. Adjusted EPS for the year (which the company said excludes certain significant items) increased 19% to $3.15 compared to $2.64 in the prior year.
Net sales for HSNi grew 4% over the prior year to $3.4 billion. By segment, HSN's net sales increased 2% to $2.3 billion, including 7% growth in digital sales; and Cornerstone's net sales increased 9% to $1.1 billion, including 11% growth in digital sales.
HSNi also reported a 1.0% decline in average price point for the year to $62.37 from $62.92, but also a 4% increase in units shipped to 62.0 million from 59.6 million as well as a 200 basis-point increase in digital sales penetration to 46.5% from 44.5% in the prior year.
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