Shares of HSN Inc. fell 8.2 percent in early trading today after the company met second-quarter earnings expectations but fell short on the sales line.
The company, known for its TV shopping network, drove second-quarter net profits up 1.7 percent to $41.6 million, or 78 cents a diluted share, from $40.9 million, or 76 cents, a year earlier. Adjusted earnings of 81 cents were in line with Wall Street’s expectations.
Overall sales came in about $10 million shy of what analysts projected. Sales for the three months ended June 30 increased 3.6 percent to $885.6 million while Wall Street was looking for a top line of $895.4 million.
The stock fell $6.11 to $68.46 by 11 a.m. on Wall Street.
Sales at the HSN business rose 3 percent to $572.3 million, as growth in the apparel, accessories and electronics categories were offset by decreases in jewelry and home goods.
Mindy Grossman, chief executive officer, touted the apparel business to analysts on a conference call: “Our apparel and accessories business continues to defy broader market trends. The key drivers to our success [includes] our compelling assortment of propriety brands, our highly followed editorial content on the latest fashion trends and our ability to capitalize on our digital replenishment strategy.”
Grossman said the Iman Collection posted the best quarter in its six-year history and that Serena Williams anchored a successful dress event.
The Cornerstone catalogue-based unit’s top line gained 5 percent to $313.3 million.
Chief financial officer Judy Schmeling said on the call: “We appreciate that the competition for consumer spend continues to intensity in this rapidly changing retail landscape. We are also mindful of our immediate hurdle with tougher comps in the second half of this year given our outstanding performance a year ago. At HSNi we believe that remaining focused on our fundamental strategies to expand our customer file, create unique and immersive products and experiences, and leverage our strong digital platforms will lead to continued long-term success.”