WEST CHESTER, PA — QVC Group, Inc. (Nasdaq: QVCGA, QVCGP; OTCQB: QVCGB) reported a steep second quarter loss, driven by a $2.4 billion non-cash impairment charge, as sales fell amid continued pressure from declining linear TV viewership, shifting consumer behavior, and global trade uncertainty.
The company posted a $2.3 billion operating loss for the quarter, with revenue down 7% in U.S. dollars and 9% in constant currency. Adjusted OIBDA dropped 18% year-over-year, reflecting sales declines and higher fulfillment costs.
President and CEO David Rawlinson said the quarter’s results underscore the headwinds facing the live shopping industry but pointed to progress in the company’s “WIN” strategy, including growth in social and streaming revenue, diversification of sourcing to offset tariff risks, and consolidation of HSN operations at its Studio Park campus.
Segment Performance
- QxH (U.S. market) revenue declined 11% as units shipped fell 13% and shipping and handling revenue weakened, offset slightly by higher average selling prices and favorable returns. Electronics sales grew, but all other categories saw declines. Adjusted OIBDA margin contracted, with higher freight and labor costs outpacing gains from improved product mix and commission rates.
- QVC International saw revenue rise 3% in U.S. dollars but fall 3% in constant currency. The segment faced lower units shipped and average selling prices, though apparel sales improved. Operating income rose due to the absence of prior-year restructuring costs, but margins were pressured by higher labor rates in Europe.
- Cornerstone revenue dropped 8%, reflecting continued softness in home furnishings and décor. Margins were squeezed by sales declines and higher administrative costs tied to its transformation plan.
Balance Sheet and Liquidity
QVC ended the quarter with $64 million more in cash, supported by operating cash flow and borrowings. Total debt rose by $74 million to $1.93 billion drawn on its credit facility, with $1.2 billion in additional availability as of June 30. In July, the company borrowed another $975 million, leaving roughly $200 million available under the facility.
The company’s consolidated leverage ratio remained above 3.5x, limiting its ability to make unrestricted dividends or other payments, though QVC remains in compliance with all debt covenants.
Rawlinson said while the turnaround will take time, the company believes it has the right plan in place to reposition for growth, emphasizing the push into streaming and digital commerce to offset traditional TV declines.
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