Electronics, Fashion Propel HSN in Q4


A strong showing in consumer electronics helped push revenue at HSN Inc. northward in the fourth quarter, as traditional categories like fashion and wellness continued their momentum.
Total revenue at HSN was up 9% to $915.2 million in the quarter, fueled by a 23% increase at its Cornerstone Brands catalog unit and 4% growth at the shopping network. For the full year, total sales increased 9% to $3 billion.
The company said revenue growth was due mainly to strong sales in consumer electronics, fashion and wellness categories. In October, about a month before they were available to the general public, HSN first launched Microsoft's Xbox 360 Kinect system (which allows users to play video games without a handheld controller) and sold out in 15 minutes. JVC also launched new camcorder technology first on HSN in December, about a month prior to its unveiling at the January Consumer Electronics Show. The channel also sold 170,000 digital imaging scanners in the period.
Cash flow also increased at a healthy pace during the quarter - at $93.3 million it was up 6% in the period.
Operating income declined 1% to $64.2 million at HSN in the period, but was up 3% overall due to a 36% gain at Cornerstone.
Investors were a bit skittish, driving HSN, Inc. stock down more than 3% ($1.14 per share) to $29.35 each in afternoon trading Wednesday.
On a conference call with analysts, CEO Mindy Grossman said that the focus during the fourth quarter was on creating "appointments to view," primarily event-type programming that began in the third quarter with a Rod Stewart concert that ultimately led to the sale of 30,000 CDs. Grossman said that continued with the launch of a Mariah Carey Holiday CD on the channel and a partnership with Paramount where HSN integrated clips from the studio's Morning Glory movie on its morning shows.
"These marketing collaborations will continue into 2011 given the positive response from our customers to entertainment programming, as well as our ability to generate new marketing revenue," Grossman said, adding that HSN partnered with Paramount again, integrating clips from its Never Say Never, the recently released Justin Bieber film.