HSN shares decline after 4Q falls short

HSN reports sales and profit gains in 4Q but misses expectations

Associated Press

ST. PETERSBURG, Fla. (AP) -- Home shopping network operator HSN Inc. reported Thursday that its fourth-quarter profit jumped on an increase in revenue as consumers bought more of its goods.

The results, however, fell below market expectations and its shares fell on the news.

HSN sells its products on television, online and in brick-and-mortar stores through its two operating segments, HSN and Cornerstone. The company said it earned $56.1 million, or $1 per share, for the quarter that ended Dec. 31. It earned $46.5, or 76 cents per share, for the same quarter a year earlier. On an adjusted basis, it earned 76 cents per share in the prior year.

The company's total revenue increased 7 percent to $982.9 million from $922 million. That included a 7 percent increase at HSN to $683.8 million and a 6 percent increase to $299.1 million at Cornerstone, both of which reported a major jump in digital sales.

Analysts polled by FactSet expected the company to earn $1.01 per share on revenue of $996.5 million.

The company said sales were strong in electronics, home design, household and beauty, partially offset by lower sales in jewelry. The company reported a 10 percent decline in revenue from shipping and handling, primarily due to an increase in shipping and handling promotions.

HSN CEO said the results reflect the company's ability to capitalize on the shift in retail driven by technology, social networks and mobility.

The company's gross profit margin decreased 30 basis points to 32.9 percent from 33.2 percent, due largely to these promotions. It said this was partially offset by increases in product margins.

Shares of HSN, based in St. Petersburg, Fla., fell $1.82, or 3 percent, to $56.04 in afternoon trading. Its shares have climbed steadily over the past 52 weeks, increasing in value by more than 50 percent.

Its stock, even with the day's decline, remains at the higher end of its 52-week trading range of $35.02 to $60.87.

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