EVINE Live Reports First Quarter Results
“The EVINE team executed extremely well given both the recent changes at the company and the challenges we are seeing in the overall retail marketplace. By bringing added discipline and a greater commitment towards building a cohesive, more balanced business strategy, we’re proving that we can deliver both great exciting products to our customers, and improved profitability to our stakeholders,” said Bob Rosenblatt, Chairman and Interim CEO.
The Company also announced an improved inventory position, which decreased 6% versus the same period last year, the largest decrease since the fourth quarter of 2012, and an improved gross margin, which increased 60 basis points versus the same period last year to 36.8%.
Further strengthening the organization’s operations, the Company recently announced two new members of the senior leadership team, both of whom are highly experienced retail executives. Nicole Ostoya was appointed Chief Marketing Officer and most recently, Michael Henry as Chief Merchandising Officer.
“Both Nicole and Michael are exciting additions to the EVINE family, each with great track records in their previous endeavors. Together they will bring more energy and focus to attracting new customers while capturing an even greater share of wallet from our existing shoppers,” added Rosenblatt.
Michael Henry brings 35 years of retail experience, including 10 years of TV shopping experience to EVINE Live. Most recently, Henry was with Eastern Home Shopping, ran Merchandising, Planning and Programming at QVC Italia, and led the Beauty category at HSN-US. In addition to Henry’s merchandising experience he has also held multiple senior marketing roles throughout his career, which will bring added synergy between merchandising and marketing at EVINE Live.First Quarter 2016 Results
- Beauty was the fastest growing category at 19% vs. the prior year, followed closely by Fashion at 18%, Home & Consumer Electronics declined by 4% and Jewelry & Watches declined by 2%.
- Return rate for the quarter was 19.2%; an improvement of 110 basis points year-over-year.
- Gross profit dollars increased 7.2% to $61.4 million. Gross profit as a percentage of sales increased 60 basis points to 36.8%.
- Adjusted EBITDA increased to $3.4 million primarily due to improved merchandising margins and increased discipline in operating expenses and shipping & handling margin.
- Operating expense increased $3.8 million year-over-year to $65.0 million, a 6% increase, driven primarily by a $1.4 million increase in variable costs from an 8% increase in unit volume, and a $1 million increase in executive and management transition costs.
- EPS for the fiscal 2016 first quarter decreased to ($0.09), which includes $3.6 million in executive and management transition costs and $80 thousand in distribution facility consolidation and technology upgrade costs. In comparison, EPS for the fiscal 2015 first quarter was ($0.08), which included $2.6 million in executive and management transition costs.
Liquidity and Capital Resources
As of April 30, 2016, total cash, including restricted cash, was $33.2 million, compared to $12.3 million at the end of the fourth quarter of fiscal 2015. The Company also had $17.1 million of unused availability on its revolving credit facility with PNC Bank at the end of the first quarter, 2016.
On March 10, 2016, EVINE Live closed on a $17 million bank term loan with GACP Finance Co., LLC. The Company expects to use the borrowings for working capital and general corporate purposes as well as to strengthen the overall liquidity position of the company.
The Company expects second quarter sales growth to be in the low single digits with second quarter Adjusted EBITDA similar to the first quarter result in 2016.
The Company expects full year sales growth relatively in line with 2015 with improved Adjusted EBITDA year-over-year.