National Jeweler Network

Financial Reporting

Jewelry sales slow for HSN as Q1 sales decline

May 05, 2014

St. Petersburg, Fla.--HSN Inc., the parent company of on-air and online retailer HSN, reported Thursday that the retailer’s sales were down 1 percent in the first quarter, with jewelry reported as one of its weak sellers.

HSN’s sales for the three-month period ended March 31 totaled $544.5 million, compared with $550.1 million in the year-earlier period. The company said that growth came from home design, which was offset by lower sales in electronics, jewelry and health.

Digital sales proved to be a bright spot for the retailer during the quarter, up 5 percent during the three-month period and increasing to 38 percent of the company’s total sales from 36 percent in the year-earlier period.

The average price point for HSN was down 3 percent year-over-year to $56.38.

Profits for the retailer were also down 1 percent during the quarter to $190.6 million, while gross margin was flat at 35 percent.

In addition to HSN, which sells online and on-air, HSN Inc. also operates a company called Cornerstone, which is comprised of a group of home and apparel lifestyle brands selling via catalog, online and through 11 retail and outlet stores.

Net sales for the overall company increased 1 percent to $777.4 million, according to HSN Inc., while gross profit was down 2 percent and operating income plummeted 20 percent.

“Similar to the overall retail sector, our results were impacted in the first quarter partially due to severe weather across the country, and softness in women's apparel, particularly at Garnet Hill. At HSNi, we are seeing improved performance, as demand strengthened throughout March,” said Mindy Grossman, CEO of HSN, Inc. “I believe our opportunity to drive growth remains intact and we are pleased with the areas of strength that we demonstrated during the quarter, including an increase in digital penetration of 220 basis points to 47 percent, mobile growth of 44 percent and reaching our highest customer levels to date.”