Cornerstone net sales up 20% in 1st quarter
Home Accents Today Staff -- Home Accents Today, 5/4/2011 10:06:28 AM
ST. PETERSBURG, Fla. — HSN, Inc. reported results for the first quarter ended March 31, 2011 for HSN, Inc. and its two operating segments, HSN and Cornerstone.
HSN Inc.'s net sales grew 6% over the prior year to $724.0 million.
Cornerstone's net sales increased 20% to $197.8 due to strength at Cornerstone's three largest brands, Frontgate, Ballard Designs and Garnet Hill; as well as investment in catalog circulation and digital marketing. E-commerce grew 23%.
Gross profit at Cornerstone increased 18% to $76.8 million. Gross profit margin declined 70 basis points to 38.8% from 39.5% in the prior year. The margin decline was primarily attributable to increased promotional activity to drive additional demand and higher inbound freight costs, partially offset by leverage over fixed warehousing costs and the favorable impact of a new outbound shipping contract.
HSN's net sales increased 1% to $526.2 million following strong comparable sales growth the prior year of 9%. The sales growth was driven by electronics and fashion, partially offset by lower sales in fitness and housewares. HSN.com sales increased 7% over the prior year's increase of 15% and represent 33.2% of HSN's net sales, up from 31.6% in the prior year. Average price point and units shipped increased 4% and 1%, respectively.
"Our focus on maximizing performance through innovative product launches and events, strategic partnerships and increased digital efforts led to HSNi sales growth of 6%, e-commerce sales penetration of 40% and an Adjusted EPS gain of 14%," said Mindy Grossman, CEO of HSN, Inc. "We are committed to positioning our business for long-term success by delivering on our strategy of offering unique products and experiences, deepening customer engagement and accelerating e-commerce growth across the portfolio."
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