Revenue Performance - Consolidated Qurate Retail revenue decreased by 11.4% or $302 million for the three months ended March 31, 2024, compared to the same period in the prior year[142]. - Revenue from QxH decreased by $62 million, while QVC International revenue decreased by $20 million, and CBI revenue decreased by $28 million[142]. - The Corporate and other segment's revenue decline of $192 million was attributed to the divestiture of Zulily in the prior year[142]. - QVC's consolidated net revenue decreased by 3.7% to $2,111 million for the three months ended March 31, 2024, compared to $2,193 million in the same period of 2023[176]. - The decrease in net revenue was primarily due to a 2.0% decrease in average selling price per unit (ASP) and a 1.5% decrease in units shipped, partially offset by a $27 million decrease in estimated product returns[176]. - QxH's net revenue declined by 3.8%, driven by a 4.0% decrease in units shipped and a 0.5% decrease in ASP[179]. - QVC International's net revenue in constant currency decreased by 3.4%, primarily due to a 4.7% decrease in ASP, despite a 3.9% increase in units shipped[180]. - CBI's consolidated net revenue decreased by 10.8% to $231 million, primarily due to a 7% decrease in ASP and a 5% decrease in units shipped[189]. Operating Income and Adjusted OIBDA - Operating income for Consolidated Qurate Retail was $145 million for the three months ended March 31, 2024, down from $176 million in the prior year[142]. - Adjusted OIBDA for Consolidated Qurate Retail increased to $259 million for the three months ended March 31, 2024, compared to $179 million in the prior year[142]. - Consolidated operating income decreased by $31 million to $145 million for the three months ended March 31, 2024, primarily due to a $93 million decrease at QVC International[145]. - Adjusted OIBDA increased by 44.7% or $80 million to $259 million for the three months ended March 31, 2024, driven by a $46 million increase at QxH[149]. Expenses and Charges - QVC recorded restructuring charges of $13 million during the three months ended March 31, 2023, as part of its turnaround strategy[131]. - SG&A expenses (excluding stock-based compensation) decreased by $8 million, driven by a $17 million decrease in consulting expenses[183]. - Stock-based compensation increased to $12 million for the three months ended March 31, 2024, up from $9 million in the prior year[186]. Cash Flow and Debt - Cash and cash equivalents totaled $1,102 million as of March 31, 2024, with QVC holding $311 million, CBI $79 million, and Corporate $712 million[163]. - The projected uses of cash for 2024 include capital expenditures between $185 million and $200 million and approximately $217 million for interest payments on outstanding debt[166]. - QVC's consolidated leverage ratio was greater than 3.5 to 1.0 as of March 31, 2024, restricting its ability to make dividends or other restricted payments under senior secured notes[162]. - As of March 31, 2024, Qurate Retail's variable rate debt amounts to $1,295 million with a weighted average interest rate of 6.8%[195]. - Fixed rate debt totals $4,658 million, with QVC's portion at $3,086 million and a weighted average interest rate of 5.2%[195]. - Corporate and other fixed rate debt amounts to $1,572 million with a weighted average interest rate of 6.1%[195]. Foreign Exchange and Interest Rate Exposure - Qurate Retail is exposed to foreign exchange rate fluctuations, with reported Adjusted OIBDA impacted by approximately $1 million for every 1% change in foreign currency exchange rates relative to the U.S. Dollar[195]. - The company manages interest rate exposure by maintaining a mix of fixed and variable rate debt, issuing fixed rate debt with low stated interest rates and significant terms to maturity[195]. - Interest rate swaps are monitored for fair value and effective interest rates, with management evaluating their effectiveness against historical trends[196]. - The company believes that losses from interest rate swaps would be largely offset by the effects of interest rate movements on underlying debt facilities[196]. Other Financial Highlights - QVC received cumulative insurance proceeds of $660 million related to the Rocky Mount fulfillment center fire, with net gains of $208 million recognized[137]. - QVC International sold properties in Germany and the U.K. for net cash proceeds of $102 million and $80 million, respectively, recognizing gains of $69 million and $44 million[139]. - Qurate Retail recognized a loss of $64 million on the divestiture of Zulily in the second quarter of 2023[123]. - Net earnings decreased to $8 million for the three months ended March 31, 2024, down from $33 million in the same period of the previous year[157]. - The total unrecognized compensation cost related to unvested equity awards was approximately $90 million as of March 31, 2024[144]. - QVC recorded a $1 million gain on sale for the three months ended March 31, 2024, compared to $113 million in gains for the same period in 2023[185].
Qurate Retail(QRTEB) - 2024 Q1 - Quarterly Report