HSN Inc. generated $629.6 million during first-quarter 2009, a 7% dip from $676.9 million a year ago. But the company’s net income fell by 68% during the same period, from $9.3 million a year ago to $3 million. The quarter ended March 31.
Within its HSN operation, which is comprised of its television shopping network as well as online sales, sales slipped 1%, from $479 million to $474.9 million. Operating income rose, however, from $24.5 to $26.2 million.
This division’s fortunes are based off a greater number of sales at lower prices. HSN shipped 9.4 million units at an average price of $56.67 each, compared with 9.1 million units a year earlier, with an average price of $60.07.
HSN attributed its results to “select promotional pricing, product mix and sales of key items at lower price points” in a statement accompanying its financials.
Its Cornerstone business, which provides home and apparel goods through a variety of brands, did not fare as well. This unit pulled in $154.7 million, a 22% drop from $197.9 million a year ago. Its operating loss widened from $9.4 million a year ago to $12.3 million.
Cornerstone shipped 2.7 million units, down from 3.3 million units during first-quarter 2008. The average price point fell as well, from $64.26 to $62.67.
“For Cornerstone, we continued to experience sales challenges due to product category exposure in luxury home and apparel,” Mind Grossman, HSN Inc.’s CEO said in a statement. “In response, we reduced catalog circulation by over 30% and aggressively managed inventories which declined by 28% compared to last year.”
During the quarter, Cornerstone distributed 60.5 million catalogs, down from 87.2 million in first-quarter 2008.
The company cut its circulation by 19% during 2008, and indicated its circulation was 324 million catalogs annually in its end-2008 financials.
