Trade Resources Industry Knowledge Backcountry. COM Revenues Grow But Disappoint in Second Quarter

Backcountry. COM Revenues Grow But Disappoint in Second Quarter

Liberty Interactive Corporation reported aggregrate revenues at its E-commerce businesses' increased 10 percent to $481 million for the second quarter. While Provide Commerce, Backcountry.com and Bodybuilding.com all increased revenue, the increase came in below anticipated levels due to softness in demand for their products and slightly lower average order values.

ADVERTISEMENT BuySeasons experienced a decrease in revenue as they focused on more profitable channels and cost containment. Adjusted OIBDA decreased 27 percent to $19 million. The decrease in adjusted OIBDA was due to increased technology and personnel costs at these subsidiaries to support anticipated revenue growth which did not materialize in the quarter, slightly lower product margins, increased packaging costs, increased returns, and increased marketing spend that has not yielded expected sales growth. Operating income decreased $14 million to a loss of $16 million. The decrease in operating income was primarily attributable to the items discussed above, as well as slightly higher amortization and depreciation, the impairment of intangibles at Evite, somewhat offset by a decline in stock-based compensation based on slower than anticipated growth.

On July 30, 2014, Liberty and FTD announced the execution of a definitive agreement under which FTD will acquire Liberty's Provide Commerce floral and gifting businesses. Under the terms of the $430 million transaction, Liberty will receive 10.2 million shares of FTD common stock representing 35 percent of the combined company and $121 million in cash. FTD and Liberty expect to complete the transaction by the end of 2014. Provide Commerce's RedEnvelope business will be excluded from the transaction.

 On October 10, 2013, Liberty announced that its board had authorized management to pursue a plan to recapitalize its Liberty Interactive Group tracking stock into two new tracking stocks, one (currently the Liberty Interactive Group common stock) to be renamed the QVC Group common stock and the other to be designated as the Liberty Digital Commerce Group common stock. The Liberty Digital Commerce Group would have had attributed to it Liberty's subsidiaries Provide Commerce, Backcountry.com, Bodybuilding.com, CommerceHub, Right Start, and Evite, along with cash and certain liabilities. The QVC Group, which is currently known as the Liberty Interactive Group, would have attributed to it Liberty's subsidiary QVC, Inc. and its approximate 38 percent interest in HSN, Inc., along with cash and certain liabilities.

 On July 30, 2014, Liberty provided an update on the proposed QVC Group and Liberty Digital Commerce Group tracking stocks. Liberty reaffirmed its plan to create the QVC Group tracking stock and disclosed that, in light of the pending Provide Commerce transaction discussed above, it was re-evaluating the optimal structure and best alignment of Liberty's digital commerce assets. Management continues to review the proposed recapitalization and no assurance can be given as to when or if it will be completed.

Source: http://www.sportsonesource.com/news/spor/spor_article.asp?section=4&Prod=1&id=52252
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