In the fourth quarter, QVC recorded its highest single-day sales total ever, at over $80 million, according to Brian L. Roberts, president of Philadelphia-based, QVC-parent Comcast Corp.
“The domestic business continued to drive QVC’s performance, with over 18 percent growth in operating cash flow and higher operating margins,” he said. “QVC is also making significant investments in Germany and Japan. QVC Japan had a strong launch year in 2001 and QVC Germany reached near break-even in the fourth quarter of 2001 and is expected to contribute to consolidated operating cash flow in 2002.”
For the fourth quarter ended Dec. 31, QVC’s operating margin hit 18.7 percent, lifted by a 21.3 percent margin in the U.S. unit. That compared with an operating margin of 17.9 percent a year earlier, when the network’s domestic margin was 19.9 percent.
QVC’s U.S. business, comprised of its TV shopping network and QVC.com, produced fourth-quarter operating earnings of $232 million on sales of $1.08 billion, up from year-ago earnings of $196 million on volume of $986 million. Its U.K. business kicked in operating income of $12.4 million on sales of $80 million in the quarter, while the German and Japanese units logged respective operating losses of $1 million and $7 million on revenue of $64 million and $30 million.
For the full year, QVC’s operating cash flow reached $722 million, an increase of 16.6 percent over $619 million in 2000, as sales advanced 10.8 percent to tally $3.92 billion versus $3.54 billion.
Looking ahead, QVC said it expects in 2002:
To generate gains in the low to mid-teens in operating cash flow, and in the low double digits in revenue.
To invest $15 million in its QVC-Japan joint venture with Mitsui, which is projected to have full-year operating losses of about $23 million.
To spend $175 million on upgrading and extending its distribution and data networks.