QVC Group, Inc. (“QVC Group”) (Nasdaq: QVCGA, QVCGB, QVCGP)
today reported fourth quarter and year end 2024 results(1).
“2024 was an important year for the company and we achieved
several milestones. We successfully completed Project Athens,
resulting in a second straight year of Adjusted OIBDA growth as
reported and enhanced operating discipline. We also reduced our
debt levels to strengthen the balance sheet and grew our streaming
business. We faced challenges in the second half of 2024, driven by
heightened competition for viewership with the Olympics and the
election, as well as a conservative consumer environment, both of
which pressured our top line results and resulted in sales
deleverage,” said David Rawlinson, President and CEO of QVC Group.
“In November, we announced a new three-year strategy focused on
returning the business to growth. We are moving quickly to
transform into a scaled player in live social shopping and believe
we have the key assets to win in this market. To enable this
strategy we are moving decisively, including consolidating
headquarters and studio operations into West Chester, Pennsylvania,
re-naming the company to QVC Group, ramping up social media
operations, and continuing to actively manage our balance
sheet.”
Fourth quarter and full year 2024 headlines:
- Qurate Retail, Inc. renamed to QVC Group, Inc. on February 21,
2025
- QVC Group revenue decreased 6% in Q4 and 5%(2) in full year in
both US Dollars and constant currency(3)
- Generated operating loss of $1.3 billion in Q4 and $809 million
in full year
- Adjusted OIBDA(4) decreased 8% in Q4 and 1%(2) in full year in
US Dollars
- In constant currency adjusted OIBDA(4) decreased 8% in Q4 and
was flat(2) in full year
- QxH revenue decreased 8% in Q4 and 6% in full year
- QVC International revenue was flat in Q4 and decreased 2% in
full year in US Dollars
- In constant currency(3), revenue was flat in Q4 and in full
year
- Cornerstone revenue decreased 7% in Q4 and 11% in full
year
- Reduced QVC Group principal amount of debt by $442 million in
2024 and extended maturity profile
Discussion of Results
Unless otherwise noted, the following discussion compares
financial information for the three months and year ended December
31, 2024 to the same periods in 2023.
FOURTH
QUARTER 2024 FINANCIAL RESULTS
(amounts in millions)
4Q23
4Q24
% Change
% Change Constant Currency(a)
Revenue
QxH
$
2,159
$
1,980
(8
)%
QVC International
679
680
—
%
—
%
Cornerstone
305
284
(7
)%
Total QVC Group Revenue
$
3,143
$
2,944
(6
)%
(6
)%
Operating Income (Loss)
QxH(b)
$
(193
)
$
(1,352
)
NM
QVC International
80
98
23
%
23
%
Cornerstone
18
(4
)
NM
Unallocated corporate cost
(8
)
(13
)
(63
)%
Total QVC Group Operating Income
(Loss)
$
(103
)
$
(1,271
)
NM
NM
Adjusted OIBDA (Loss)
QxH(b)
$
221
$
204
(8
)%
QVC International
99
111
12
%
12
%
Cornerstone
27
5
(81
)%
Unallocated corporate cost
(7
)
(8
)
(14
)%
Total QVC Group Adjusted OIBDA
$
340
$
312
(8
)%
(8
)%
____________________
a)
For a definition of constant
currency financial metrics, see the accompanying schedules.
b)
In the fourth quarter of 2023,
QxH incurred a $326 million non-cash impairment charge related to
goodwill. In the fourth quarter of 2024, QxH incurred a $1.5
billion non-cash impairment charge related to goodwill and
tradenames. These charges are included in operating income and
excluded from Adjusted OIBDA. See reconciling schedule 2.
FULL
YEAR 2024 FINANCIAL RESULTS
(amounts in millions)
2023
2024
% Change
% Change Constant Currency(a)
Revenue
QxH
$
6,995
$
6,598
(6
)%
QVC International
2,454
2,399
(2
)%
—
%
Cornerstone
1,165
1,040
(11
)%
Total QVC Group Revenue (excluding
Zulily)
$
10,614
$
10,037
(5
)%
(5
)%
Zulily(b)
301
-
NM
Total QVC Group Revenue (as
reported)
$
10,915
$
10,037
(8
)%
(8
)%
Operating Income (Loss)
QxH(c)
$
275
$
(1,045
)
NM
QVC International(d)
370
275
(26
)%
(23
)%
Cornerstone(e)
35
2
(94
)%
Unallocated corporate cost
(33
)
(41
)
(24
)%
Total QVC Group Operating Income (Loss)
(excluding Zulily)
$
647
$
(809
)
NM
NM
Zulily(b)
(57
)
-
NM
Total QVC Group Operating Income (Loss)
(as reported)
$
590
$
(809
)
NM
NM
Adjusted OIBDA (Loss)
QxH(c)
$
746
$
765
3
%
QVC International(d)
325
333
2
%
6
%
Cornerstone(e)
67
36
(46
)%
Unallocated corporate cost
(23
)
(31
)
(35
)%
Total QVC Group Adjusted OIBDA
(excluding Zulily)
$
1,115
$
1,103
(1
)%
—
%
Zulily(b)
(41
)
-
NM
Total QVC Group Adjusted OIBDA (as
reported)
$
1,074
$
1,103
3
%
4
%
____________________
a)
For a definition of constant
currency financial metrics, see the accompanying schedules.
b)
Zulily was divested on May 24,
2023. For the year ended December 31, 2023, Zulily recorded $5
million in restructuring charges. These items are included in
operating income and excluded from Adjusted OIBDA.
c)
For the year ended December 31,
2023, QxH incurred (i) a $326 million non-cash impairment charge
related to goodwill, (ii) a $208 million net gain on insurance
proceeds representing insurance proceeds received in excess of fire
losses, (iii) $13 million of restructuring costs related to
workforce reduction, (iv) a $17 million gain on the sale of the
Rocky Mount, NC fulfillment center (“Rocky Mount”) and (v) $16
million of penalties. For the year ended December 31, 2024, QxH
incurred (i) a $1.5 billion non-cash impairment charge related to
goodwill and tradenames and (ii) $10 million of restructuring
charges related to a plan to shift its information technology
operating model. These items are included in operating income and
excluded from Adjusted OIBDA. See reconciling schedule 2.
d)
For the year ended December 31,
2023, QVC International incurred $113 million of gains related to
the sale leaseback of its UK and German fulfillment centers
partially offset by $17 million in restructuring charges. For the
year ended December 31, 2024, QVC International recorded $8 million
of restructuring charges related to a plan to shift its information
technology operating model, partially offset by a $1 million gain
related to the sale leaseback of a German property. These items are
included in operating income and excluded from Adjusted OIBDA. See
reconciling schedule 2.
e)
For the year ended December 31,
2023, Cornerstone recorded $2 million in restructuring charges
related to a workforce reduction which are included in operating
income and excluded from Adjusted OIBDA. See reconciling schedule
2.
QxH
QxH revenue declined in the fourth quarter and full year
primarily due to lower units shipped, which decreased 5% in both
periods, as well as lower average selling price and shipping and
handling revenue. These factors were partially offset by favorable
returns in both periods. QxH grew apparel with declines in all
other categories in the fourth quarter and reported declines in all
categories for the full year.
Operating loss in the fourth quarter and full year was primarily
driven by a $1.5 billion non-cash impairment charge related to
goodwill and tradenames. For the fourth quarter and full year 2024,
Adjusted OIBDA margin(4) increased mainly due to higher product
margins and favorable operating costs and selling, general and
administrative expenses. These gains were partially offset by
fulfillment (warehouse and freight) pressure in the fourth quarter
and sales deleverage in both periods. Product margins increased due
to higher initial margins driven by Project Athens initiatives.
Fulfillment margin pressure in the quarter was due to higher
freight rates and fulfillment center wages. Operating expenses
decreased 11% in the fourth quarter and 7% in the full year due to
lower commissions. Selling, general and administrative expenses
declined 10% in the quarter and 4% in the full year due to lower
personnel and outside services costs. For the full year, lower
selling, general and administrative expense was partially offset by
higher marketing costs to support QVC’s Age of Possibility
campaign.
QVC International
Exchange rate fluctuations were neutral on fourth quarter
results and negatively impacted full year 2024 results. For the
full year, the US Dollar strengthened 7% against the Japanese Yen,
partially offset by weakening 3% against the British Pound. The
financial metrics presented in this press release also provide a
comparison of the percentage change in QVC International’s results
in constant currency (where applicable) to the comparable figures
calculated in accordance with US GAAP for the fourth quarter and
full year 2024.
QVC International’s constant currency revenue was flat for the
fourth quarter and full year with a 1% and 3% increase in units
shipped, respectively, offset by a 2% and 3% decline in average
selling price, respectively. QVC International reported growth in
home, accessories and apparel with a decline in beauty in the
fourth quarter. For the full year, QVC International experienced
constant currency growth in home, accessories, electronics and
jewelry with a decline in beauty and apparel.
Operating margin increased in the fourth quarter and decreased
for the full year and Adjusted OIBDA margin increased in both
periods. Operating income decreased for the full year primarily as
a result of comparing against $113 million of gains related to the
sale and leaseback of UK and German fulfillment centers recorded in
the first quarter of 2023. For both periods, QVC International
reported higher product margins and favorable selling, general and
administrative expenses, partially offset by fulfillment pressure.
Product margins increased due to favorable returns and vendor
negotiations. Administrative costs declined due to lower outside
services and personnel costs. Fulfillment pressure was mainly
attributable to higher freight rates and fulfillment center wages,
as well as increased units shipped.
Cornerstone
Cornerstone revenue decreased in the fourth quarter and full
year, reflecting softness and competitive promotional pressure in
the home sector. Cornerstone is implementing a transformation plan
to improve its revenue and profitability given the continued
challenges in the housing sector. Operating income and Adjusted
OIBDA margin decreased for the fourth quarter and full year due to
costs for outside services related to its transformation plan,
higher personnel expenses, and sales deleverage.
FOURTH
QUARTER 2024 SUPPLEMENTAL METRICS
(amounts in millions unless otherwise
noted)
4Q23
4Q24
% Change
% Change Constant Currency(a)
QxH
Cost of Goods Sold % of Revenue
68.4
%
68.8
%
40
bps
Operating Income Margin (%)(b)
(8.9
)%
(68.3
)%
NM
Adjusted OIBDA Margin (%)(b)
10.2
%
10.3
%
10
bps
Average Selling Price
$
55.76
$
53.82
(3
)%
Units Sold
(5
)%
Return Rate(c)
13.9
%
13.5
%
(40
) bps
eCommerce Revenue(d)
$
1,392
$
1,314
(6
)%
eCommerce % of Total Revenue
64.5
%
66.4
%
190
bps
Mobile % of eCommerce Revenue(e)
70.1
%
71.4
%
130
bps
QVC International
Cost of Goods Sold % of Revenue
63.0
%
63.2
%
20
bps
Operating Income Margin (%)
11.8
%
14.4
%
260
bps
Adjusted OIBDA Margin (%)
14.6
%
16.3
%
170
bps
Average Selling Price
(2
)%
(2
)%
Units Sold
1
%
Return Rate(c)
18.1
%
17.5
%
(60
) bps
eCommerce Revenue(d)
$
359
$
366
2
%
2
%
eCommerce % of Total Revenue
52.9
%
53.8
%
90
bps
Mobile % of eCommerce Revenue(e)
70.5
%
76.8
%
630
bps
Cornerstone
Cost of Goods Sold % of Revenue
59.0
%
60.6
%
160
bps
Operating Income Margin (%)
5.9
%
(1.4
)%
NM
Adjusted OIBDA Margin (%)
8.9
%
1.8
%
(710
) bps
eCommerce Revenue(d)
$
245
$
225
(8
)%
eCommerce % of Total Revenue
80.3
%
79.2
%
(110
) bps
____________________
a)
For a definition of constant
currency financial metrics, see the accompanying schedules.
b)
In the fourth quarter of 2023,
QxH incurred a $326 million non-cash impairment charge related to
goodwill. In the fourth quarter of 2024, QxH incurred a $1.5
billion non-cash impairment charge related to goodwill and
tradenames. These charges are included in operating income and
excluded from Adjusted OIBDA. See reconciling schedule 2.
c)
Measured as returned sales over
gross shipped sales in US Dollars.
d)
Based on net revenue.
e)
Based on gross US Dollar
orders.
FULL
YEAR 2024 SUPPLEMENTAL METRICS
(amounts in millions unless otherwise
noted)
2023
2024
% Change
% Change Constant Currency(a)
QxH
Cost of Goods Sold % of Revenue
67.3
%
66.3
%
(100
) bps
Operating Income Margin (%)(b)
3.9
%
(15.8
)%
NM
Adjusted OIBDA Margin (%)(b)
10.7
%
11.6
%
90
bps
Average Selling Price
$
53.33
$
52.98
(1
)%
Units Sold
(5
)%
Return Rate(c)
15.2
%
14.8
%
(40
) bps
eCommerce Revenue(d)
$
4,321
$
4,219
(2
)%
eCommerce % of Total Revenue
61.8
%
63.9
%
210
bps
Mobile % of eCommerce Revenue(e)
69.1
%
70.7
%
160
bps
LTM Total Customers(f)
8.1
7.6
(6
)%
QVC International
Cost of Goods Sold % of Revenue
63.7
%
63.9
%
20
bps
Operating Income Margin (%)(g)
15.1
%
11.5
%
(360
) bps
Adjusted OIBDA Margin (%)(g)
13.2
%
13.9
%
70
bps
Average Selling Price
(5
)%
(3
)%
Units Sold
3
%
Return Rate(c)
19.1
%
18.9
%
(20
) bps
eCommerce Revenue(d)
$
1,217
$
1,257
3
%
5
%
eCommerce % of Total Revenue
49.6
%
52.4
%
280
bps
Mobile % of eCommerce Revenue(e)
69.9
%
74.5
%
460
bps
LTM Total Customers(f)
4.1
4.0
(2
)%
Cornerstone
Cost of Goods Sold % of Revenue
61.5
%
59.5
%
(200
) bps
Operating Income Margin (%)(h)
3.0
%
0.2
%
(280
) bps
Adjusted OIBDA Margin (%)(h)
5.8
%
3.5
%
(230
) bps
eCommerce Revenue(d)
$
902
$
795
(12
)%
eCommerce % of Total Revenue
77.4
%
76.4
%
(100
) bps
____________________
a)
For a definition of constant
currency financial metrics, see the accompanying schedules.
b)
For the year ended December 31,
2023, QxH incurred (i) a $326 million non-cash impairment charge
related to goodwill, (ii) a $208 million net gain on insurance
proceeds representing insurance proceeds received in excess of fire
losses, (iii) $13 million of restructuring costs related to
workforce reduction, (iv) a $17 million gain on the sale of the
Rocky Mount, NC fulfillment center (“Rocky Mount”) and (v) $16
million of penalties. For the year ended December 31, 2024, QxH
incurred (i) a $1.5 billion non-cash impairment charge related to
goodwill and tradenames and (ii) $10 million of restructuring
charges related to a plan to shift its information technology
operating model. These items are included in operating income and
excluded from Adjusted OIBDA. See reconciling schedule 2.
c)
Measured as returned sales over
gross shipped sales in US Dollars.
d)
Based on net revenue.
e)
Based on gross US Dollar
orders.
f)
LTM: Last twelve months.
g)
For the year ended December 31,
2023, QVC International incurred $113 million of gains related to
the sale leaseback of its UK and German fulfillment centers
partially offset by $17 million in restructuring charges. For the
year ended December 31, 2024, QVC International recorded $8 million
of restructuring charges related to a plan to shift its information
technology operating model, partially offset by a $1 million gain
related to the sale leaseback of a German property. These items are
included in operating income and excluded from Adjusted OIBDA. See
reconciling schedule 2.
h)
For the year ended December 31,
2023, Cornerstone recorded $2 million in restructuring charges
related to a workforce reduction which are included in operating
income and excluded from Adjusted OIBDA. See reconciling schedule
2.
FOOTNOTES
1)
QVC Group will discuss these
highlights and other matters on QVC Group’s earnings conference
call that will begin at 5:00 p.m. (E.T.) on February 27, 2025. For
information regarding how to access the call, please see “Important
Notice” later in this document.
2)
Adjusted for the divestiture of
Zulily on May 24, 2023.
3)
For a definition of constant
currency financial metrics, see the accompanying schedules.
Applicable reconciliations can be found in the financial tables at
the beginning of this press release.
4)
For definitions and applicable
reconciliations of Adjusted OIBDA and Adjusted OIBDA margin, see
the accompanying schedules.
NOTES
Cash and Debt
The following presentation is provided to separately identify
cash and debt information.
(amounts in millions)
9/30/2024
12/31/2024
Cash and cash equivalents
(GAAP)
$
873
$
905
Debt:
QVC senior secured notes(a)
$
2,732
$
2,732
QVC senior secured bank credit
facility
1,280
1,195
Total Subsidiary Level Debt
$
4,012
$
3,927
Senior notes(a)
792
792
Senior exchangeable debentures(b)
779
778
Corporate Level Debentures
1,571
1,570
Total QVC Group Debt
$
5,583
$
5,497
Unamortized discount, fair market value
adjustment and deferred loan costs
(524
)
(529
)
Total QVC Group Debt (GAAP)
$
5,059
$
4,968
Other Financial Obligations:
Preferred stock(c)
$
1,272
$
1,272
QVC, Inc. leverage(d)
3.1x
3.1x
____________________
a)
Face amount of Senior Notes and
Debentures with no reduction for the unamortized discount.
b)
Face amount of Senior
Exchangeable Debentures with no adjustment for the fair market
value adjustment.
c)
Preferred Stock has an 8% coupon,
$100 per share initial liquidation preference plus accrued and
unpaid dividends and is non-voting. It is subject to mandatory
redemption on March 15, 2031. The Preferred Stock is considered a
liability for GAAP purposes, and is recorded net of capitalized
costs.
d)
As defined in QVC’s credit
agreement.
Cash at QVC Group increased $32 million in the fourth quarter as
cash from operations more than offset debt reduction and capital
expenditures. Total debt at QVC Group decreased $86 million in the
fourth quarter primarily due to net debt repayment under QVC’s bank
credit facility.
QVC’s bank credit facility has $1.2 billion drawn with
incremental availability of approximately $1.6 billion, net of
letters of credit. QVC’s leverage ratio, as defined by the QVC
revolving credit facility, was 3.1x at quarter-end.
As of December 31, 2024, QVC’s consolidated leverage ratio (as
calculated under QVC’s senior secured notes) was greater than 3.5x
and as a result QVC is restricted in its ability to make unlimited
dividends or other restricted payments. Dividends made by QVC to
service the principal and interest of indebtedness of its parent
entities, as well as payments made by QVC to QVC Group under an
intercompany tax sharing agreement in respect of certain tax
obligations of QVC and its subsidiaries, are permitted under the
bond indenture and credit agreement.
QVC Group is in compliance with all debt covenants as of
December 31, 2024.
Important Notice: QVC Group (Nasdaq: QVCGA, QVCGB, QVCGP)
will discuss QVC Group’s earnings release on a conference call
which will begin at 5:00 p.m. (E.T.) on February 27, 2025. The call
can be accessed by dialing (877) 704-4234 or (215) 268-9904,
passcode 13748875, at least 10 minutes prior to the start time. The
call will also be broadcast live across the Internet and archived
on our website. To access the webcast go to
https://investors.qvcgrp.com/investors/news-events/ir-calendar.
Links to this press release and replays of the call will also be
available on QVC Group’s website.
This press release includes certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995, including statements about business strategies and
initiatives (including our new three-year strategy and
Cornerstone’s transformation plan) and their expected benefits,
market potential, future financial performance and prospects,
future repayment of debt and other matters that are not historical
facts. These forward-looking statements involve many risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied by such statements, including,
without limitation, possible changes in market acceptance of new
products or services, competitive issues, regulatory matters
affecting our businesses, continued access to capital on terms
acceptable to QVC Group, changes in law and government regulations,
the availability of investment opportunities, general market
conditions (including as a result of future public health crises),
issues impacting the global supply chain and labor market and use
of social media and influencers. These forward-looking statements
speak only as of the date of this press release, and QVC Group
expressly disclaims any obligation or undertaking to disseminate
any updates or revisions to any forward-looking statement contained
herein to reflect any change in QVC Group's expectations with
regard thereto or any change in events, conditions or circumstances
on which any such statement is based. Please refer to the publicly
filed documents of QVC Group, including the most recent Form 10-K,
for additional information about QVC Group and about the risks and
uncertainties related to QVC Group's business, which may affect the
statements made in this press release.
NON-GAAP FINANCIAL MEASURES
To provide investors with additional information regarding our
financial results, this press release includes a presentation of
Adjusted OIBDA, which is a non-GAAP financial measure, for QVC
Group, QVC (and certain of its subsidiaries), Zulily (through May
23, 2023) and Cornerstone together with a reconciliation to that
entity or such businesses’ operating income, as determined under
GAAP. QVC Group defines Adjusted OIBDA as operating income (loss)
plus depreciation and amortization, stock-based compensation, and
where applicable, separately identified impairments, litigation
settlements, restructuring, penalties, acquisition-related costs,
fire related costs, net (including Rocky Mount inventory losses),
and (gains) losses on sale leaseback transactions. Further, this
press release includes Adjusted OIBDA margin, which is also a
non-GAAP financial measure. QVC Group defines Adjusted OIBDA margin
as Adjusted OIBDA divided by revenue.
QVC Group believes Adjusted OIBDA is an important indicator of
the operational strength and performance of its businesses by
identifying those items that are not directly a reflection of each
business’s performance or indicative of ongoing business trends. In
addition, this measure allows management to view operating results
and perform analytical comparisons and benchmarking between
businesses and identify strategies to improve performance. Because
Adjusted OIBDA is used as a measure of operating performance, QVC
Group views operating income as the most directly comparable GAAP
measure. Adjusted OIBDA is not meant to replace or supersede
operating income or any other GAAP measure, but rather to
supplement such GAAP measures in order to present investors with
the same information that QVC Group's management considers in
assessing the results of operations and performance of its assets.
Please see the attached schedules for applicable
reconciliations.
This press release also references certain financial metrics on
a constant currency basis, which is a non-GAAP measure, for QVC
Group. Constant currency financial metrics, as presented herein,
are calculated by translating the current-year and prior-year
reported amounts into comparable amounts using a single foreign
exchange rate for each currency.
QVC Group believes constant currency financial metrics are an
important indicator of financial performance, in particular for
QVC, due to the translational impact of foreign currency
fluctuations relating to its subsidiaries in the UK, Germany, Italy
and Japan. We use constant currency financial metrics to provide a
framework to assess how our businesses performed excluding the
effects of foreign currency exchange fluctuations. Please see the
financial tables at the beginning of this press release for a
reconciliation of the impact of foreign currency fluctuations on
revenue, operating income, Adjusted OIBDA and average selling
price.
SCHEDULE 1
The following table provides a reconciliation of QVC Group’s
Adjusted OIBDA to its operating income (loss) calculated in
accordance with GAAP for the three months ended December 31, 2023,
March 31, 2024, June 30, 2024, September 30, 2024 and December 31,
2024 and years ended December 31, 2023 and 2024.
CONSOLIDATED
OPERATING INCOME AND ADJUSTED OIBDA RECONCILIATION
(amounts in millions)
4Q23
1Q24
2Q24
3Q24
4Q24
2023
2024
QVC Group Operating Income
(Loss)
$
(103
)
$
145
$
165
$
152
$
(1,271
)
$
590
$
(809
)
Depreciation and amortization
98
99
96
95
93
407
383
Stock compensation expense
13
16
3
3
10
53
32
Restructuring, penalties and fire related
costs, net of (recoveries)(a)
—
—
18
—
—
(189
)
18
Impairment of intangible assets(b)
326
—
—
—
1,480
326
1,480
(Gains) losses on sale of assets and sale
leaseback transactions(c)
6
(1
)
—
—
—
(113
)
(1
)
QVC Group Adjusted OIBDA
$
340
$
259
$
282
$
250
$
312
$
1,074
$
1,103
____________________
a)
The year ended December 31, 2023
includes (i) a $208 million net gain on insurance proceeds
representing insurance proceeds received in excess of fire losses,
(ii) $13 million of restructuring costs related to workforce
reduction, (iii) a $17 million gain on the sale of Rocky Mount,
(iv) $16 million of penalties and (v) $2 million and $5 million in
restructuring charges related to workforce reductions at
Cornerstone and Zulily, respectively. Zulily was divested on May
24, 2023. The year ended December 31, 2024 includes (i) $10 million
of restructuring charges at QxH and (ii) $8 million of
restructuring charges at QVC International related to a plan to
shift their information technology operating model.
b)
Includes a $326 million non-cash
impairment charge related to goodwill recognized at QxH for the
year ended December 31, 2023 and a $1.5 billion non-cash impairment
charge related to goodwill and tradenames recognized at QxH for the
year ended December 31, 2024.
c)
Includes $113 million of gains on
the sale leaseback transactions of UK and German properties for the
year ended December 31, 2023 and a $1 million gain related to the
sale leaseback of a German property for the year ended December 31,
2024.
SCHEDULE 2
The following table provides a reconciliation of Adjusted OIBDA
for QVC and Cornerstone to that entity or such businesses’
operating income (loss) calculated in accordance with GAAP for the
three months ended December 31, 2023, March 31, 2024, June 30,
2024, September 30, 2024 and December 31, 2024 and years ended
December 31, 2023 and 2024.
SUBSIDIARY ADJUSTED
OIBDA RECONCILIATION
(amounts in millions)
4Q23
1Q24
2Q24
3Q24
4Q24
2023
2024
QVC
Operating income (loss)
$
(113
)
$
157
$
163
$
164
$
(1,254
)
$
645
$
(770
)
Depreciation and amortization
91
92
88
87
84
372
351
Stock compensation
10
12
2
1
5
37
20
Restructuring, penalties and fire related
costs, net of (recoveries) (including Rocky Mount inventory
losses)
—
—
18
—
—
(196
)
18
(Gains) on sale of assets and sale
leaseback transactions
6
(1
)
—
—
—
(113
)
(1
)
Impairment of intangible assets
326
—
—
—
1,480
326
1,480
Adjusted OIBDA
$
320
$
260
$
271
$
252
$
315
$
1,071
$
1,098
QxH Adjusted OIBDA
$
221
$
185
$
194
$
182
$
204
$
746
$
765
QVC International Adjusted
OIBDA
$
99
$
75
$
77
$
70
$
111
$
325
$
333
Cornerstone
Operating income (loss)
$
18
$
(3
)
$
11
$
(2
)
$
(4
)
$
35
$
2
Depreciation and amortization
7
7
8
8
9
26
32
Stock compensation
2
2
—
—
—
4
2
Restructuring costs
—
—
—
—
—
2
—
Adjusted OIBDA
$
27
$
6
$
19
$
6
$
5
$
67
$
36
QVC GROUP, INC.
BALANCE SHEET
INFORMATION
(unaudited)
December 31, 2024
December 31, 2023
amounts in millions
Assets
Current assets:
Cash and cash equivalents
$
905
1,121
Trade and other receivables, net
1,143
1,308
Inventory, net
1,061
1,044
Other current assets
190
209
Total current assets
3,299
3,682
Property and equipment, net
502
512
Intangible assets not subject to
amortization
4,337
5,862
Intangible assets subject to amortization,
net
402
526
Operating lease right-of-use assets
600
635
Other assets, at cost, net of accumulated
amortization
103
151
Total assets
$
9,243
11,368
Liabilities and Equity
Current liabilities:
Accounts payable
$
776
895
Accrued liabilities
953
983
Current portion of debt
867
642
Other current liabilities
128
97
Total current liabilities
2,724
2,617
Long-term debt
4,101
4,698
Deferred income tax liabilities
1,313
1,531
Preferred stock
1,272
1,270
Operating lease liabilities
598
615
Other liabilities
120
148
Total liabilities
10,128
10,879
Equity/Attributed net assets
(liabilities)
(971
)
385
Non-controlling interests in equity of
subsidiaries
86
104
Total liabilities and equity
$
9,243
11,368
QVC GROUP, INC.
STATEMENT OF OPERATIONS
INFORMATION
(unaudited)
Years ended December
31,
2024
2023
amounts in millions
Revenue:
Total revenue, net
$
10,037
10,915
Operating costs and expenses:
Cost of goods sold (exclusive of
depreciation shown separately below)
6,524
7,230
Operating expense
734
795
Selling, general and administrative,
including stock-based compensation
1,708
1,869
Impairment of intangible assets
1,480
326
Gains on sale of assets and sale leaseback
transactions
(1
)
(113
)
Restructuring, penalties and fire related
costs, net of (recoveries)
18
(189
)
Depreciation and amortization
383
407
10,846
10,325
Operating income (loss)
(809
)
590
Other income (expense):
Interest expense
(468
)
(451
)
Dividend and interest income
50
52
Realized and unrealized gains (losses) on
financial instruments, net
(60
)
(61
)
Loss on disposition of Zulily, net
—
(64
)
Tax sharing income (expense) with Liberty
Broadband
(4
)
(11
)
Other, net
—
11
(482
)
(524
)
Earnings (loss) from continuing operations
before income taxes
(1,291
)
66
Income tax (expense) benefit
41
(160
)
Net earnings (loss)
(1,250
)
(94
)
Less net earnings (loss) attributable to
the noncontrolling interests
40
51
Net earnings (loss) attributable to QVC
Group shareholders
$
(1,290
)
(145
)
QVC GROUP, INC.
STATEMENT OF CASH FLOWS
INFORMATION
(unaudited)
Years ended December
31,
2024
2023
amounts in millions
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net earnings (loss)
$
(1,250
)
(94
)
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization
383
407
Impairment of intangible assets
1,480
326
Stock-based compensation
32
53
Noncash interest expense
7
9
Realized and unrealized (gains) losses on
financial instruments, net
60
61
Gains on sale of assets and sale leaseback
transactions
(1
)
(113
)
Gain on insurance proceeds, net of fire
related costs
—
(225
)
Deferred income tax expense (benefit)
(211
)
80
Insurance proceeds received for inventory,
operating expenses and business interruption losses
—
226
Loss on disposition of Zulily, net
—
64
Other noncash charges (credits), net
(6
)
15
Changes in operating assets and
liabilities
Decrease (increase) in accounts
receivable
144
36
Decrease (increase) in inventory
(28
)
257
Decrease (increase) in prepaid expenses
and other assets
67
68
(Decrease) increase in trade accounts
payable
(104
)
(34
)
(Decrease) increase in accrued and other
liabilities
(48
)
(217
)
Net cash provided (used) by operating
activities
525
919
CASH FLOWS FROM INVESTING
ACTIVITIES:
Cash proceeds from dispositions of
investments
7
71
Capital expenditures
(199
)
(230
)
Cash paid for disposal of Zulily
—
(41
)
Expenditures for television distribution
rights
(37
)
(113
)
Insurance proceeds received for fixed
asset loss
—
54
Proceeds from sale of fixed assets
6
208
Payments for settlements of financial
instruments
—
(179
)
Payments from settlements of financial
instruments
—
167
Other investing activities, net
(2
)
9
Net cash provided (used) by investing
activities
(225
)
(54
)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Borrowings of debt
2,014
1,267
Repayments of debt
(2,454
)
(2,258
)
Withholding taxes on net share settlements
of stock-based compensation
(2
)
(1
)
Dividends paid to noncontrolling
interest
(51
)
(53
)
Dividends paid to common shareholders
(4
)
(8
)
Indemnification agreement settlement
—
45
Other financing activities, net
(1
)
(2
)
Net cash provided (used) by financing
activities
(498
)
(1,010
)
Effect of foreign currency exchange rates
on cash, cash equivalents and restricted cash
(15
)
(4
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
(213
)
(149
)
Cash, cash equivalents and restricted cash
at beginning of period
1,136
1,285
Cash, cash equivalents and restricted cash
at end of period
$
923
1,136
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250226901465/en/
QVC Group, Inc. Shane Kleinstein, 720-875-5432
QVC (NASDAQ:QVCGB)
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