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  • marubozo100 marubozo100 Feb 5, 2013 12:28 PM Flag

    Q4 and Next Year View

    I think sales for Q4 in the $147.6M-$154.98M range with Q4 EBITDA of $1.9M

    2013 Sales growth in the 4-7% range with EBITDA in the $16M-$20M range

    Along with continued reductions in carriage...they need to do something to increase sales growth to the 10%+ range before I would declare KS & Team as anything other than "average with no vision other than to be another H or Q." (which is not necessarily bad...but do we really need another H or Q??)

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    • I have no reason to disagree. I am concerned that with the staff they have and their knowledge of QVC's best practices is that they see no other applicable strategy. All the senior players are talented but 95% of their career exposure has been at QVC. Good experience to be sure but when trying to take a very weak 3rd position in the market to a level that will ensure sustainable growth it may not be enough. The wheel has been grinding very slowly here over the past 2 years. It would be nice to see some Mindy type experimentation with the programing. It really can not hurt and it could help.

      It does occur to me that there may be too much Q in the mix currently. Mike George has done a fabulous job at QVC and he is an outsider. Mindy Grossman has become the new poster woman for tele-shopping and well deserved as well. Both by taking the best of the fundamentals from the Q playbook but adding to the best practices of the platform. It is hard to see what has been a break through strategy here . I do respect the operational job that the team has delivered but the marketing is nearly non existent. I refuse to believe that all the great marketing ideas died when Doug Briggs retired. In fact they did not as can be seen by Q and H running out nice growth.There will be no real mention of a meaningful growth strategy on the conference call I am certain but hey ! One can hope.Still is undervalued based on the operations execution.

      Sentiment: Buy

      • 1 Reply to retailexecutive
      • The #1 challenge that has impacted everything at SNBC forever is the Cost of Carriage (aka as MSO Extortion). Q and H have never had that issue because carriage was provided to the MSO's early on via stock ownership and flat % of sales commission rates in exchange for carriage. So Q and H have kept their ASP virtually flat forever and have reaped the rewards (Q far more than H).

        VV's fixed cost carriage has forced the merchandise strategies for many years because they could not afford to change until their was a roadmap to reduce carriage fees. That could not have happened until 2008....and even then it was a crapshoot as the big redux could not have happened for 4 more years....until Jan 2013!

        OK...Jan 2013 is here and we finally have carriage costs that are somewhat less than MSO Extortion (but still far more expensive than it is worth in todays gazillion channel digital world where Amazon gets entry to all the homes that Q, H, SNBC get...for...the sum of Zero carriage costs via broadband...broadband fat enough to beam in all the video Amzn can use).

        Q was worth $15B in it is $11.5B despite sales that have almost doubled and fat EBITDA margins that Amazon will never have...Mike George has been unable to recapture $3.5B in market cap. Why?? Mindy and the goils at H have been at it for 7 years and have been doing well the past 2 years (as measured by pps)...BUT...H market cap is $2B to $3B LESS than Diller always thought it was worth back in 2004! ....and Q owns 36% of H. Why?

        Lastly....why is Q reporting earnings at 5:30PM on 2/27/2013? They always report at 11AM? What is going on at Q (aka LINTA)?

        The insider purchasing is appreciated BUT we need creative thinking to grow upside sales....that creative thinking is sorely missing from the current regime!