Qurate Retail(US:QRTEA)2021-08-06 16:48Financial Data and Key Metrics Changes - In Q2 2021, Qurate Retail reported year-over-year revenue growth of 1% and OIBDA growth of 2% on a constant currency basis, with revenue increasing 11% and OIBDA increasing 12% compared to 2019 [8][39] - Adjusted OIBDA margin improved by 40 basis points, reflecting a favorable gross margin due to lower inventory obsolescence expense and improved product margin [42][43] Business Line Data and Key Metrics Changes - QxH revenue declined 1% year-over-year but grew 6% compared to 2019, with OIBDA growing 1% from last year [17][39] - Apparel and accessories revenue grew 19% and 11% respectively, while beauty declined 10% due to reduced airtime [41][42] - Zulily's revenue declined 6% year-over-year but grew 9% compared to 2019, impacted by marketing pressures and supply constraints [32][48] - Cornerstone delivered record Q2 revenue and OIBDA, driven by strength in home categories and apparel at Garnet Hill [34][49] Market Data and Key Metrics Changes - QVC International sustained strong revenue and OIBDA growth, with revenue up 5% led by Japan and Germany [46][47] - E-commerce revenue for QVC International grew 4%, with total customers declining 4% year-over-year but growing 5% compared to 2019 [46] Company Strategy and Development Direction - The company is focused on expanding its digital and video content distribution, launching a streaming service on Comcast and a new social shopping app called Qurio [28][29] - Strategic priorities include innovation, enhancing customer engagement, and leveraging advanced analytics for personalized experiences [30][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term growth prospects despite supply chain challenges and inflationary pressures [36][39] - The company is well-positioned to benefit from trends towards online shopping and digital engagement [12][14] Other Important Information - The company plans to return a substantial portion of free cash flow to shareholders, with share repurchases and potential special dividends [53][69] - Management highlighted the importance of retaining best customers, with a retention rate exceeding 99% [74] Q&A Session Summary Question: Challenges related to advertising and viewership - Management acknowledged Zulily's challenges with paid marketing and emphasized the positive viewership trends in QxH, with traditional pay TV viewership increasing [58][60] Question: Insights on July performance and fashion rebound - Management noted the potential for further growth in apparel and accessories, while home categories faced tough comparisons [64][66] Question: QxH margin outlook - Management confirmed expectations for flat margins for the remainder of the year, acknowledging inflationary pressures but also taking steps to mitigate them [67] Question: Capital allocation and share repurchase strategy - Management indicated plans to utilize various tools for returning capital to shareholders, including share repurchases and potential special dividends [69] Question: Behavior of best customers pre, during, and post-pandemic - Management reported high retention rates among best customers and noted a significant increase in their spending and purchase frequency in the latest quarter [74]