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Qurate Retail, Inc. (QRTEA)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 revenue decreased 6% year over year to $2.944B; Adjusted OIBDA fell 8% to $312M, and the company recorded a $1.271B operating loss driven by a $1.5B non‑cash impairment at QxH .
  • Segment mix: QxH revenue declined 8%; QVC International was flat; Cornerstone declined 7%. International delivered stronger profitability with Adjusted OIBDA up 12% YoY and margin up 170 bps .
  • Balance sheet actions continued: cash ended Q4 at $905M; total debt reduced by $86M in Q4 and $442M for 2024; QVC leverage 3.1x; dividends restricted under note covenants at >3.5x leverage .
  • Strategic pivot: rebranded to QVC Group, consolidated HQ/studios to West Chester, and launched a 3‑year plan to scale live social shopping; streaming audience metrics expanded materially per the call (MAUs +80%, minutes +27%, attributed revenue +19%) .

What Went Well and What Went Wrong

What Went Well

  • International profitability resilience: QVC International Adjusted OIBDA increased from $99M to $111M (+12% YoY); Adjusted OIBDA margin rose 170 bps to 16.3% in Q4 .
  • Operating discipline and debt reduction: Reduced 2024 principal debt by $442M; ended Q4 with $905M cash, while maintaining compliance with debt covenants .
  • Management execution and strategic clarity: “We successfully completed Project Athens… enhanced operating discipline… reduced our debt levels… grew our streaming business… moving quickly to transform into a scaled player in live social shopping” — David Rawlinson, President & CEO .

What Went Wrong

  • Core US deleverage and revenue pressure: QxH revenue fell 8% with units down 5% and ASP down 3%, leading to sales deleverage despite product margin improvement .
  • Impairment and GAAP loss: Recognized ~$1.5B non‑cash impairment (goodwill and tradenames) at QxH, driving a Q4 operating loss of $1.271B .
  • Fulfillment cost headwinds: Higher freight rates and fulfillment center wages pressured margins, partially offsetting SG&A improvements .

Financial Results

Consolidated performance vs prior year and prior quarter

MetricQ4 2023Q3 2024Q4 2024
Total Revenue ($USD Billions)$3.143 $2.344 $2.944
Operating Income (Loss) ($USD Millions)$(103) $152 $(1,271)
Adjusted OIBDA ($USD Millions)$340 $250 $312
Adjusted OIBDA Margin %10.8% (340/3,143) 10.7% (250/2,344) 10.6% (312/2,944)
Diluted EPS ($USD)— (not disclosed)— (not disclosed)— (not disclosed)

Segment revenue and profitability

SegmentMetricQ4 2023Q3 2024Q4 2024
QxHRevenue ($USD Millions)$2,159 $1,521 $1,980
QxHAdjusted OIBDA ($USD Millions)$221 $182 $204
QVC InternationalRevenue ($USD Millions)$679 $571 $680
QVC InternationalAdjusted OIBDA ($USD Millions)$99 $70 $111
CornerstoneRevenue ($USD Millions)$305 $252 $284
CornerstoneAdjusted OIBDA ($USD Millions)$27 $6 $5

KPIs and margin detail (selected)

SegmentKPIQ4 2023Q3 2024Q4 2024
QxHCOGS % of Revenue68.4% 65.5% 68.8%
QxHOperating Income Margin %(8.9)% 7.0% (68.3)% (impairment)
QxHAdjusted OIBDA Margin %10.2% 12.0% 10.3%
QxHAverage Selling Price ($)$55.76 $51.76 $53.82
QxHUnits Sold (% YoY)(5)% (6)% (5)%
QxHReturn Rate (%)13.9% 14.6% 13.5%
QxHeCommerce Revenue ($USD Millions)$1,392 $967 $1,314
QxHeCommerce % of Revenue64.5% 63.6% 66.4%
QxHMobile % of eCommerce70.1% 70.7% 71.4%
InternationalCOGS % of Revenue63.0% 64.6% 63.2%
InternationalOperating Income Margin %11.8% 10.0% 14.4%
InternationalAdjusted OIBDA Margin %14.6% 12.3% 16.3%
InternationaleCommerce Revenue ($USD Millions)$359 $297 $366
InternationaleCommerce % of Revenue52.9% 52.0% 53.8%
InternationalMobile % of eCommerce70.5% 76.1% 76.8%
CornerstoneAdjusted OIBDA Margin %8.9% 2.4% 1.8%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
CapExFY 2025—~$230M (from earnings call) New quantitative disclosure
OIBDA MarginFY 2025–2027—Aim to maintain double‑digit OIBDA margins New qualitative target
Revenue OutlookFY 2025—2025 will be a transition year; expect growing social/streaming to progressively offset core declines into 2026 Narrative guidance
Operations2025—Consolidate HQ/studios to West Chester, PA; rebrand to QVC Group Strategic actions announced

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Social/streaming focusBegan “Age of Possibility” campaign; product margin and cost discipline “Transitioning to next phase… reach aggregated audiences on social/streaming” 3‑year strategy to scale live social shopping; streaming MAUs +80%, minutes +27%, attributed revenue +19% Accelerating
Supply chain costsFulfillment favorable YoY (warehouse/freight efficiencies) Fulfillment pressure from wages/freight Continued fulfillment pressure (higher freight rates and wages) Worsening vs mid‑year
Macro/viewershipRevenue in line with discretionary; margin expansion; debt reduction Headlines (news/election) impacted viewership; revenue underperformed Olympics and election heightened competition for viewership; conservative consumer Persistent headwind
International trendsConstant currency flat; mix shift to higher margin; restructuring charges Ccy revenue down 1%; margin down on fulfillment costs and lower product margin Ccy revenue flat; margins up; OIBDA +12% on product margins and SG&A favorability Improving
Product/category mixQxH: declines in beauty/apparel; jewelry growth; higher initial margins QxH: declines across categories; higher product margins QxH: apparel grew; other categories declined; product margins up (higher initial margins) Mixed, margins favorable
Regulatory/legalDebt covenants and leverage disclosures Leverage >3.5x restricts dividends Leverage >3.5x continues to restrict dividends; all covenants in compliance Unchanged

Management Commentary

  • “We successfully completed Project Athens, resulting in a second straight year of Adjusted OIBDA growth as reported and enhanced operating discipline… we are moving quickly to transform into a scaled player in live social shopping” — David Rawlinson, President & CEO .
  • “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…” .
  • International: “Adjusted OIBDA margin increased in both periods… Product margins increased due to favorable returns and vendor negotiations” .

Q&A Highlights

  • 2025 cadence and margin goals: Management framed 2025 as a transition year with stronger acceleration in social/streaming; aim to maintain double‑digit OIBDA margins through the 3‑year plan .
  • International outperformance: Slower cord‑cutting and less intense competition; plan to leverage social shopping capabilities internationally .
  • Facilities footprint: St. Petersburg to be decommissioned, consolidating content at Studio Park, consistent with HQ/studio consolidation strategy .

Estimates Context

  • S&P Global consensus estimates were unavailable for QRTEA via our SPGI integration at this time; therefore, we cannot present revenue or EPS vs Wall Street consensus. Note: consensus comparisons will be added when S&P Global mapping becomes available.

Key Takeaways for Investors

  • International profitability is a bright spot with margin expansion and OIBDA growth, supporting consolidated margins despite top‑line pressure .
  • The $1.5B impairment highlights structural pressure at QxH and underscores urgency of pivot to social/streaming; expect narrative to focus on execution of the 3‑year strategy .
  • Cost control remains effective (OpEx −11% in Q4; SG&A −10%), partially offset by fulfillment cost inflation (freight/wages) — watch freight rate trends and labor costs as margin drivers .
  • Balance sheet management continues (cash $905M; 2024 debt −$442M; 3.1x leverage), but dividend flexibility is constrained under >3.5x notes leverage; debt actions and OIBDA trajectory are key to unlocking capital returns .
  • Streaming momentum is material (MAUs +80%, minutes +27%, attributed revenue +19%) and central to growth strategy; monitor MAU/engagement conversion into revenue/OIBDA .
  • Near‑term trading: Expect focus on impairment optics, macro viewership headwinds, and signs of stabilization at QxH; medium‑term thesis hinges on scaling social shopping and sustaining double‑digit OIBDA margins .

Source Documents Read

  • Q4 2024 8‑K earnings press release and schedules .
  • Prior quarters press releases (Q3 2024, Q2 2024, Q1 2024) .
  • Q4 2024 earnings call highlights and transcript references .