HSN, Inc. (HSNI) has reported a 41.07 percent plunge in profit for the quarter ended Sep. 30, 2016. The company has earned $20.16 million, or $0.38 a share in the quarter, compared with $34.21 million, or $0.64 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $27.24 million, or $0.52 a share compared with $37.48 million or $0.70 a share, a year ago.
Revenue during the quarter dropped 4.84 percent to $823.02 million from $864.87 million in the previous year period. Gross margin for the quarter contracted 138 basis points over the previous year period to 34.03 percent. Total expenses were 95.52 percent of quarterly revenues, up from 93.31 percent for the same period last year. That has resulted in a contraction of 221 basis points in operating margin to 4.48 percent.
Operating income for the quarter was $36.88 million, compared with $57.83 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $62.91 million compared with $78.14 million in the prior year period. At the same time, adjusted EBITDA margin contracted 139 basis points in the quarter to 7.64 percent from 9.03 percent in the last year period.
"Similar to last quarter, our third quarter results reflect weaker performance in specific HSN merchandising categories; softness in the outdoor segment within the Cornerstone portfolio; and a difficult consumer environment. This was compounded by disruptive and distracting high-profile media events, particularly in August and September, that influenced our customers' buying patterns and television viewership behaviors," stated Mindy Grossman, chief executive officer of HSN, Inc. "We have strategic actions underway to improve HSNi's performance and have made progress in certain areas," added Ms. Grossman. "While our near-term outlook remains cautious, and it will take time to fully realize the benefits of our initiatives, I am confident in our ability to execute on our plans while proactively managing our overall expenses to drive HSNi’s long-term performance and value creation for our shareholders."
Operating cash flow improves
HSN, Inc. has generated cash of $114 million from operating activities during the nine month period, up 8.65 percent or $9.07 million, when compared with the last year period.
The company has spent $29.13 million cash to meet investing activities during the nine month period as against cash outgo of $46.69 million in the last year period.
The company has spent $81.36 million cash to carry out financing activities during the nine month period as against cash outgo of $155.05 million in the last year period.
Cash and cash equivalents stood at $67.44 million as on Sep. 30, 2016, up 6.76 percent or $4.27 million from $63.17 million on Sep. 30, 2015.
Debt comes down
HSN, Inc. has recorded a decline in total debt over the last one year. It stood at $625.69 million as on Sep. 30, 2016, down 9.67 percent or $66.97 million from $692.66 million on Sep. 30, 2015. Total debt was 48.71 percent of total assets as on Sep. 30, 2016, compared with 51.24 percent on Sep. 30, 2015. Debt to equity ratio was at 3.86 as on Sep. 30, 2016, down from 6.67 as on Sep. 30, 2015.
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