HSN Inc., driven by strong digital growth and electronics, reported that fourth-quarter net income rose 20.4 percent to $56.1 million, or $1 per diluted share.
That compares to $46.5 million, or 76 cents, in the year-ago quarter.
Net sales in the quarter ended Dec. 31 rose 7 percent to $982.9 million, from $922 million in the same quarter a year ago. For the year, HSN’s net profits grew 6.2 percent to $130.7 million from $123 million, and sales rose to $3.27 billion from $3.07 billion.
Officials cited strength in electronics, particularly tablets, headphones and e-readers, as well as the beauty and home categories, while women’s apparel continues to be challenged.
“Digital is a key strategic growth driver. It’s now nearly half of our total business,” representing 47 percent, Mindy Grossman, HSN’s chief executive officer, said during a conference call.
Grossman also cited HSN’s redesign of all of its digital platforms, calling the project “transformational” for the business. The relaunch was last month.
HSN continues to refine its selling channels and seek ways to keep customers entertained and engaged. It’s been increasing the cadence of its concert series, enhancing its “Arcade” gaming experience, pursuing marketing partnerships with major brands on top of those already established, such as Coca-Cola, and striving to capitalize on trends in mobile shopping, technology and social networks. HSN is also developing new merchandise shops, including one for shoes launching in March, which is being modeled after the existing dress shop.
“We are seeing customers spending more time on HSN,” Grossman said, characterizing the site’s content as “immersive” and the overall experience as becoming more aspirational. “We will continue to add new elements to the site and refine it,” Grossman said.
While the results were good, the revenues fell slightly below expectations, causing the stock to drop 7.7 percent, or $4.43, to close at $53.43.