Financial 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 2024, with declines in all segments [131]. - Operating income decreased by $131 million for the three months ended March 31, 2025, with a $94 million decrease at QxH and a $34 million decrease at QVC International [134]. - Adjusted OIBDA for the consolidated QVC Group was $177 million for the three months ended March 31, 2025, down from $259 million in the same period in 2024 [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, primarily due to decreases in Adjusted OIBDA at QxH, QVC International, and CBI [138]. - Operating income for the three months ended March 31, 2025, was $14 million, down from $145 million in the same period in 2024 [138]. - Net losses for the three months ended March 31, 2025, were $91 million, compared to net earnings of $8 million for the same period in 2024 [145]. - 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, driven by a 16.6% decrease in units shipped [174]. Cost and Expenses - 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]. - Operating expenses remained stable at 8.1% of net revenue for both periods [167]. - Advertising expenses increased by $3 million or 5% to $63 million, primarily due to investments in social and streaming platforms [168]. - Selling, general and administrative expenses decreased by $16 million, driven by a $13 million reduction in personnel costs [169]. - Restructuring costs totaled $57 million for the three months ended March 31, 2025, as part of the company's WIN strategy [170]. - Stock-based compensation decreased to $4 million for the three months ended March 31, 2025, compared to $16 million in the same period in 2024 [133]. - QVC's stock-based compensation expense decreased to $4 million from $12 million in the prior year, reflecting changes in performance objectives [171]. Strategic Initiatives - 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 plans to reorganize teams across the company to support the WIN strategy, resulting in $36 million and $21 million of restructuring costs at QxH and QVC International, respectively [123]. - The company recorded $14 million in incremental depreciation due to the planned closure of the St. Petersburg, FL campus as part of its consolidation strategy [123]. Cash Flow and Financial Position - 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]. - Interest expense decreased by $5 million to $112 million for the three months ended March 31, 2025, due to lower outstanding debt [140]. - Net cash used by operating activities was $(60) million for the three months ended March 31, 2025, compared to $26 million in the same period in 2024 [153]. - Projected capital improvement spending for the remainder of 2025 is estimated to be between $140 million and $165 million [155]. - QVC's consolidated leverage ratio as of March 31, 2025, was greater than 3.5 to 1.0, restricting its ability to make dividends or other restricted payments under senior secured notes [150]. - The company expects to generate positive cash flow from operations during 2025 [152]. Market Conditions - QVC Group expects to face inflationary pressures, including higher wages and merchandise costs, which may lead to increased prices for consumers [127]. - Future net revenue will depend on QVC's ability to grow through digital platforms and retain existing customers amid economic uncertainties [125]. - QVC's international operations include televised shopping programs distributed in Germany, Japan, the U.K., and Italy, with tailored product sourcing for local markets [159].
Qurate Retail(QRTEB) - 2025 Q1 - Quarterly Report