Similar to the overall retail sector, HSN’s first quarter results were affected by severe weather across the country, as well as softness in women's apparel, particularly at Garnet Hill. The company did report improved performance at HSNi, as demand strengthened throughout March.
HSN's net sales were $544.5 million, a decrease of 1% from the prior year. Digital sales grew 5% with penetration increasing 220 basis points to 37.9%. Sales grew in home design, offset by lower sales in electronics, jewelry and health. The return rate decreased 170 basis points to 18.3% primarily due to changes in product mix. The units shipped increased 1% while the average price point decreased 3%.
Cornerstone's net sales were $232.9 million, an increase of 5% from the prior year, which were driven by strong sales growth in the home brands, partially offset by declines in the apparel brands. Digital sales grew 6% with penetration increasing 80 basis points to 67.6%. Cornerstone operates interactive, “aspirational” home and apparel lifestyle brands including Frontgate, Ballard Designs, Garnet Hill, Grandin Road, Chasing Fireflies, Improvements and Travelsmith. It operates separate e-commerce sites for all the brands, distributes more than 300 million catalogs annually and has 11 retail and outlet stores.
“I believe our opportunity to drive growth remains intact and we are pleased with the areas of strength that we demonstrated during the quarter, including an increase in digital penetration of 220 basis points to 47%, mobile growth of 44% and reaching our highest customer levels to date," said CEO Mindy Grossman.