Qurate Retail(QRTEA) - 2025 Q1 - Quarterly Report

Revenue Performance - Consolidated QVC Group revenue decreased by 10.1% or $237 million for the three months ended March 31, 2025, compared to the same period in the prior year, with declines in all segments [131]. - QxH revenue was $1,368 million, down from $1,539 million; QVC International revenue was $537 million, down from $572 million; and CBI revenue was $200 million, down from $231 million [131]. - QVC's consolidated net revenue decreased by $206 million or 9.8% to $1,905 million for the three months ended March 31, 2025, compared to $2,111 million in the prior year [161]. - QxH's net revenue declined by $171 million or 11.1%, attributed to a 9.6% decrease in units shipped and a 1.8% decrease in average selling price (ASP) [164]. - QVC International's net revenue decreased by $21 million in constant currency, driven by a 3.8% decrease in aggregate units shipped [165]. - CBI's consolidated net revenue decreased by 13.4% to $200 million for the three months ended March 31, 2025, due to a 16.6% decrease in units shipped [174]. Operating Income and Expenses - Consolidated operating income decreased by $131 million for the three months ended March 31, 2025, with QxH down $94 million and QVC International down $34 million [134]. - Operating income for the three months ended March 31, 2025, was $14 million, down from $145 million in the same period in 2024 [138]. - Adjusted OIBDA for the consolidated QVC Group was $177 million, a decrease from $259 million in the prior year [131]. - Consolidated Adjusted OIBDA decreased by 31.7% or $82 million for the three months ended March 31, 2025, compared to the same period in 2024, resulting in an Adjusted OIBDA of $177 million [138]. - QVC's cost of goods sold as a percentage of net revenue increased to 66.7% for the three months ended March 31, 2025, compared to 65.0% in the prior year [166]. - Advertising expenses rose by $3 million or 5% to $63 million for the three months ended March 31, 2025, primarily due to increased spending on social and streaming platforms [168]. Financial Position and Cash Flow - Cash and cash equivalents as of March 31, 2025, totaled $833 million, with QVC holding $295 million, CBI $91 million, and Corporate $447 million [151]. - QVC's consolidated leverage ratio was greater than 3.5 to 1.0 as of March 31, 2025, restricting its ability to make dividends or other restricted payments under senior secured notes [150]. - The projected uses of cash for the remainder of 2025 include capital improvement spending between $140 million and $165 million and approximately $254 million for interest payments on outstanding debt [155]. - QVC Group's primary source of cash during the three months ended March 31, 2025, was net debt borrowings of $69 million [154]. - The company expects to generate positive cash flow from operations during 2025 [152]. Strategic Initiatives and Market Conditions - QVC Group announced the WIN strategy on November 14, 2024, focusing on enhancing customer interactions, creating engaging content, and leveraging technology for operational efficiency [120]. - The company recorded $14 million in accelerated depreciation due to the planned closure of the St. Petersburg, FL campus as part of its consolidation strategy [123]. - Restructuring costs of $36 million and $21 million were recorded for QxH and QVC International, respectively, during the three months ended March 31, 2025 [123]. - The company is experiencing inflationary pressures, including higher wages and merchandise costs, which may lead to increased prices for consumers [127]. - Future net revenue will depend on the company's ability to grow through digital platforms and retain existing customers amid economic uncertainties [125]. - The company has seen a shift in consumer attention, with a decline in TV shopping hours and an increase in news and business TV viewership [126]. Debt and Interest - Interest expense decreased by $5 million to $112 million for the three months ended March 31, 2025, primarily due to lower outstanding debt [140]. - QVC's total debt as of March 31, 2025, included $1,850 million in variable rate debt at a weighted average interest rate of 6.0% and $2,146 million in fixed rate debt at 6.2% [182]. - QVC's reported Adjusted OIBDA for the three months ended March 31, 2025 would be impacted by approximately $1 million for every 1% change in foreign currency exchange rates relative to the U.S. Dollar [183].