HSN Inc.’s second-quarter sales gained 6.4 percent and the home shopping firm said it was holding on to more customers and growing its digital business.
Despite the sales increase, net profits dipped 3.8 percent to $30.7 million from $32 million. Earnings per diluted share rose to 61 cents from 54 cents due a stock repurchase program that reduced the number of shares outstanding. The company spent $104.4 million to buy back 2.8 million of its own shares during the quarter.
HSN is repositioning its Cornerstone business, having acquired the family lifestyle brand Chasing Fireflies and divested Smith+Noble and The Territory Ahead, the results for which were classified under discontinued operations.
Adjusted earnings totaled 67 cents a share, 7 cents ahead of analysts’ estimates.
Sales for the three months ended June 30 rose to $767.2 million from $721.1 million. Digital sales made up 43.4 percent of the total top line in the quarter, up from 41.1 percent a year earlier.
At the HSN division, where adjusted earnings before interest, taxes, depreciation and amortization rose 2.1 percent to $52.7 million and sales gained 4.1 percent to $501.9 million, average price points fell 5.4 percent to $58.64 and the number of unit shops gained 9.7 percent to 10.2 million.
Chief executive officer Mindy Grossman told analysts on a conference call that the unit’s customer file grew by 2 percent with a 7 percent gain in its “best customer” file. Customer retention was at its highest level in eight years.
“All of this speaks to our strategy of lifestyle, editorial, commerce across all our networks, developing and marketing fresh new content to engage and retain existing customers, reactivate large customers and attract new customers,” Grossman said.
The ceo pointed to the company’s efforts around the “Snow White and the Huntsman” film, which included 200 exclusive products from 25 brands.
Grossman also said HSN’s mobile business is the fastest-growing part of the company, with first-half sales nearly matching the 2011 total of $65 million.