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QG

QVC Group, Inc. (QVCGA)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 was weak: revenue fell 6% to $2.213B, operating income dropped 61% to $60M, and Adjusted OIBDA declined 32% to $169M as deleverage, tariffs, fulfillment and marketing costs compressed margins .
  • Management emphasized progress under the WIN strategy, noting QxH’s reduced YoY decline and growth in social/streaming revenue, but acknowledged “tariffs and other critical investments” pressured Adjusted OIBDA .
  • Leverage rose with bank facility borrowings; QVC Inc.’s leverage was 4.2x and the $2.9B bank facility will be reclassified to current liabilities, highlighting near-term refinancing risk and going-concern dependency on refinancing or repayment at maturity .
  • Stock reaction: shares fell sharply on the print, with premarket down ~23% on the day of the call as investors focused on top-line declines and margin pressure .

What Went Well and What Went Wrong

What Went Well

  • WIN strategy traction: “We reduced the year-over-year rate of revenue decline in our QxH segment… driven by revenue growth in our social and streaming platforms” – CEO David Rawlinson .
  • Digital mix improvement: QxH eCommerce % of total revenue increased 180 bps YoY to 65.4%; QVC International eCommerce % rose 153 bps to 53.5% .
  • Operational KPIs modestly improved: QxH average selling price rose 1% and return rate improved by 10 bps YoY; International eCommerce revenue grew 2% in USD .

What Went Wrong

  • Broad revenue declines: total revenue -6%; QxH -7%, International -1% in USD (-5% constant currency), Cornerstone -8% .
  • Margin compression: QxH Adjusted OIBDA margin fell 247 bps YoY; International -205 bps; Cornerstone swung negative, reflecting deleverage, fulfillment pressure, promotions, and tariff impacts .
  • Balance sheet risk: facility draws increased debt; leverage at 4.2x and imminent reclassification of $2.9B bank facility to current liabilities underscores refinancing risk and covenant headroom (4.5x maintenance test) .

Financial Results

Quarterly trend (oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$2,105 $2,236 $2,213
Operating Income (Loss) ($USD Millions)$14 $(2,272) $60
Adjusted OIBDA ($USD Millions)$177 $232 $169
Net Earnings (Loss) attributable to QVC Group shareholders ($USD Millions)$(100) $(2,222) $(80)
Interest Expense ($USD Millions)$(112) $(117) $(134)
Diluted EPS - Continuing Operations ($)$(12.50)*$(275.46)*$(9.92)*

Values marked with * retrieved from S&P Global.

Year-over-year comparison (Q3 2024 → Q3 2025)

MetricQ3 2024Q3 2025
Revenue ($USD Millions)$2,344 $2,213
Operating Income ($USD Millions)$152 $60
Adjusted OIBDA ($USD Millions)$250 $169

Actual vs Estimates (Q3 2025)

MetricActual Q3 2025Consensus Estimate Q3 2025
Revenue ($USD Millions)$2,213 N/A*
Adjusted EBITDA/OIBDA ($USD Millions)$169 N/A*
Primary EPS ($)$(9.92)*N/A*

Values marked with * retrieved from S&P Global. S&P Global Wall Street consensus was unavailable for Q3 2025.

Segment breakdown (Q3 2024 → Q3 2025)

SegmentRevenue ($USD Millions) Q3 2024Revenue ($USD Millions) Q3 2025Adjusted OIBDA ($USD Millions) Q3 2024Adjusted OIBDA ($USD Millions) Q3 2025Operating Income ($USD Millions) Q3 2024Operating Income ($USD Millions) Q3 2025
QxH$1,521 $1,416 $182 $135 $107 $48
QVC International$571 $566 $70 $58 $57 $43
Cornerstone$252 $231 $6 $(2) $(2) $(9)

KPIs (Q3 2024 → Q3 2025)

KPIQxH Q3 2024QxH Q3 2025QVC International Q3 2024QVC International Q3 2025Cornerstone Q3 2024Cornerstone Q3 2025
COGS % of Revenue65.5% 66.7% 64.6% 65.9% 59.9% 62.3%
Operating Income Margin (%)7.0% 3.4% 10.0% 7.6% (0.8)% (3.9)%
Adjusted OIBDA Margin (%)12.0% 9.5% 12.3% 10.2% 2.4% (0.9)%
Average Selling Price$51.76 $52.26 — (4%) change — —
Units Sold— (7%) change — — — —
Return Rate14.6% 14.5% 18.9% 19.4% — —
eCommerce Revenue ($USD Millions)$967 $926 $297 $303 $188 $174
eCommerce % of Total Revenue63.6% 65.4% 52.0% 53.5% 74.6% 75.3%
Mobile % of eCommerce Revenue70.7% 71.5% 76.1% 77.2% — —
LTM Total Customers (millions)7.9 7.0 4.0 3.9 — —

Note: Consolidated eCommerce revenue was ~$1.4B, 63% of total revenue in Q3 2025 (presentation) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Formal revenue/EPS guidanceFY/Q3 2025None providedNone providedMaintained (no formal guidance)
Bank credit facility outstandingAs of 9/30/2025$1.93B drawn at 6/30/25 $2.90B drawn; reclassified to current at 10/31/25 Increased draws; reclassification
Leverage covenant testOngoingMaintenance test at 4.5x net leverage (presentation)Leverage at 4.2x (as defined), below 4.5x test Status update
Restricted paymentsOngoingRestricted if consolidated leverage >3.5x (notes)Still restricted; dividends for debt service and tax-sharing permitted Maintained

Other relevant press release: payment of semi-annual interest and Regular Additional Distribution on 4.0% Senior Exchangeable Debentures due 2029 (Nov 17, 2025) .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3 2025)Trend
Social/streaming growth & WIN strategyQ1: TikTok partnership and belief social shopping is transformative . Q2: social/streaming approaching double-digits of QxH revenue .Continued growth; ~30% YoY revenue growth in social/streaming and ~255k new customers added via TikTok shop; management investing in content, creators, and new “Deals Channel” .Positive momentum
Linear TV viewership declineOngoing headwind noted in Q1 and Q2 .Persisting; management pivoting to digital platforms .Structural headwind; mitigation via digital
Tariffs/macro pressureQ1: tariff volatility impacted sentiment . Q2: continued tariff uncertainty .Tariffs pressured product margins; higher promotions .Ongoing headwind
Fulfillment costs & logisticsQ1/Q2: higher freight rates and labor costs .Fulfillment pressure remains (freight, wage rates in Europe), contributing to margin compression .Continued pressure
Sourcing diversificationQ2: diversified sourcing to mitigate tariffs .Reduced China penetration by 8–10%; goal of no single country > one-third of U.S. sourced goods .Progressing
Category performanceQ2: electronics growth; other categories declined .QxH saw declines across all categories; electronics weak (-14%) per call highlights .Mixed-to-weak
Regional trendsQ2 International +3% USD / -3% cc; varying category mix .International -1% USD / -5% cc; UK up ~2% and Japan down ~11% per call highlights .Mixed

Management Commentary

  • CEO David Rawlinson: “We reduced the year-over-year rate of revenue decline in our QxH segment despite the decline in linear television viewership, driven by revenue growth in our social and streaming platforms… deleveraging from our total revenue decline, tariffs and other critical investments, pressured our adjusted OIBDA.” .
  • CFO Bill Wofford (on incentives/EBITDA): “The long-term incentive portion is no longer treated as stock-based compensation and is now recognized as an expense impacting EBITDA. This change had a material impact on our 2025 results.” .
  • Executive Chairman Greg Maffei: “We will continue to invest in our social and streaming channels… expanding content and distribution, launching new channels like the Deals Channel, and partnering with creators to reach new audiences.” .

Q&A Highlights

  • Sourcing diversification: management reduced China penetration by 8–10% and aims for no single country > one-third of U.S. sourced goods to mitigate tariff/supply chain risk .
  • Digital customer acquisition: ~255k new customers via TikTok shop in Q3; average spend per customer up 4% vs Q2 2024 per highlights .
  • Segment/market commentary: UK modestly positive; Japan faces ~11% decline with a multi-year remediation plan .
  • Profitability impacts: Adjusted OIBDA down 26% (QxH) and consolidated margin contraction driven by marketing investments and deleverage; incentive plan accounting change weighed on EBITDA .

Estimates Context

  • Wall Street consensus via S&P Global was unavailable for Q3 2025 EPS and revenue, limiting beat/miss analysis. Actuals: revenue $2,213M and Adjusted OIBDA $169M; Primary EPS was negative. Values marked with * retrieved from S&P Global .
  • Given absence of consensus, near-term estimate updates likely skew negative on margin expectations (fulfillment, tariffs, marketing), while revenue trajectory may be adjusted modestly for continued linear declines offset by social/streaming growth commentary .

Key Takeaways for Investors

  • The core headwinds remain: top-line decline and cost pressure drove a sharp YoY contraction in operating income and Adjusted OIBDA; expect continued margin vigilance and tighter cost controls .
  • Balance sheet risk is elevated: leverage at 4.2x with $2.9B bank facility reclassification to current liabilities; refinancing progress and covenant headroom (4.5x test) are pivotal near-term catalysts for the stock .
  • Digital transition is working at the margin: social/streaming growth and higher digital mix (eCommerce %) are positives, but not yet offsetting linear declines; continued investment in content/creator partnerships is key .
  • Tariffs and promotions pressured product margins; sourcing diversification (reducing China exposure) should help over time, but near-term macro/tariff volatility remains a drag .
  • Watch International mix: UK stability vs Japan weakness suggests uneven regional recovery; pricing/mix and fulfillment wage inflation in Europe keep pressure on margins .
  • Trading setup: absent consensus beats, the negative stock reaction is grounded in deleverage and balance sheet risk; near-term inflection likely tied to refinancing clarity and holiday quarter digital performance .
  • Monitor free cash flow and covenant cushion: YTD FCF was a use of ~$184M vs +$102M last year; execution on working capital and capex discipline is critical to de-risk the capital structure .

Additional sources: Official Q3 press release and embedded schedules , 8-K item 2.02 and exhibits , prior quarter 8-Ks for Q1 and Q2 , and company investor site news/events .