Q1 2024 Qurate Retail Group Inc Earnings Call

May 8, 2024

Operator: Welcome to Curate Retail Incorporated's 2024 First Quarter Earnings Call. During the presentation, all participants will be in listen-only mode.

Welcome to the cure rate retail Incorporated's 2024 first quarter earnings call.

Operator: Welcome to Qurate Retail, Inc.'s 2024 Q1 earnings call. During the presentation, all participants will be in listen-only mode. Afterwards, we'll conduct a question-and-answer session. At that time, if you have a question, please press star one on your telephone keypad. As a reminder, this conference will be recorded 8 May 2024. I would now like to turn the call over to Clare Adams, Senior Manager, Investor Relations. Please go ahead.

Operator: Welcome to Qurate Retail, Inc.'s 2024 Q1 Earnings call. During the presentation, all participants will be in listen-only mode. Afterwards, we'll conduct a question-and-answer session. At that time, if you have a question, please press star one on your telephone keypad. As a reminder, this conference will be recorded 8 May 2024. I would now like to turn the call over to Clare Adams, Senior Manager, Investor Relations. Please go ahead.

During the presentation, all participants will be in listen only mode.

Operator: Afterward, we'll conduct a question and answer session. At that time, if you have a question, please press star 1 on your telephone keypad. As a reminder, this conference will be recorded on May 8, 2024. I would now like to turn the call over to Clare Adams, Senior Manager, Investor Relations.

Afterwards, we will conduct a question and answer session.

At that time, if you have a question. Please press star one on your telephone keypad.

As a reminder, this conference will be recorded May eight 2024.

I would now like to turn the call over to Claire Adams Senior manager of Investor Relations. Please go ahead.

Clare Adams: Good morning. Before we begin, we'd like to remind everyone that this call includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in the most recent forms 10-K and 10-Q filed by our company and QVC with the SEC. These forward-looking statements speak only as of the date of this call, and Carriot Retail expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in Carriot Retail's expectations with regard thereto, or any change in events, conditions, or circumstances on which any such statement is based.

David Rawlinson II: Good morning. Before we begin, we'd like to remind everyone that this call includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual events and results could differ materially due to a number of risks and uncertainties, including those mentioned in the most recent Forms 10-K and 10-Q filed by our company and QVC with the SEC. These forward-looking statements speak only as of the date of this call, and Qurate Retail expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in Qurate Retail's expectations with regard thereto, or any change in events, conditions, or circumstances on which any such statement is based. Please note that we have published slides to accompany the earnings release.

Clare Adams: Good morning. Before we begin, we'd like to remind everyone that this call includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual events and results could differ materially due to a number of risks and uncertainties, including those mentioned in the most recent Forms 10-K and 10-Q filed by our company and QVC with the SEC. These forward-looking statements speak only as of the date of this call, and Qurate Retail expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in Qurate Retail's expectations with regard thereto, or any change in events, conditions, or circumstances on which any such statement is based. Please note that we have published slides to accompany the earnings release.

Claire Adams: Good morning, before we begin we'd like to remind everyone that this call includes certain forward looking statements.

Claire Adams: Securities Litigation Reform Act of 1995, and actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in our most recent forms 10-K and 10-Q.

Claire Adams: T D. C. You would actually see these forward looking statements speak only as of the date of this call and carry retail expressly disclaims any obligation or undertaking but it doesn't need any updates or revisions to any forward looking statements contained herein to reflect any change in your retail expectations with regard thereto or any change in events conditions or circumstances.

Claire Adams: When you say.

Clare Adams: Please note that we have published slides to accompany the earnings release. On today's call, we will discuss certain non-GAAP financial measures, including adjusted OIVDA, adjusted OIVDA margin, free cash flow, and constant currency. Information regarding the Comparable Gap Metrics, along with required definitions and reconciliations, including the Preliminary Note and Schedules 1 through 3, can be found in the Earnings Press Release issued today or our Earnings Presentation, which is available on our website. Today, speaking on the earnings call, we have Curate Retail President and CEO, David Rawlinson, Curate Retail Group CFO, Bill Wofford, and Curate Retail Executive Chairman Now, I'll hand the call over to David Rawlinson.

Claire Adams: Please note that we have published slides to accompany the earnings release.

David Rawlinson II: On today's call, we'll discuss certain non-GAAP financial measures, including adjusted OIBDA, adjusted OIBDA margin, free cash flow, and constant currency. Information regarding the comparable GAAP metrics, along with required definitions and reconciliations, including preliminary notes and schedules one through three, can be found in the earnings press release issued today or our earnings presentation, which are available on our website. Today, speaking on the earnings call, we have Qurate Retail President and CEO David Rawlinson, Qurate Retail Group CFO Bill Wafford, and Qurate Retail Executive Chairman Greg Maffei. Now I'll hand the call over to David Rawlinson.

Clare Adams: On today's call, we'll discuss certain non-GAAP financial measures, including adjusted OIBDA, adjusted OIBDA margin, free cash flow, and constant currency. Information regarding the comparable GAAP metrics, along with required definitions and reconciliations, including preliminary notes and schedules one through three, can be found in the earnings press release issued today or our earnings presentation, which are available on our website. Today, speaking on the earnings call, we have Qurate Retail President and CEO David Rawlinson, Qurate Retail Group CFO Bill Wafford, and Qurate Retail Executive Chairman Greg Maffei. Now I'll hand the call over to David Rawlinson.

Claire Adams: Today's call will discuss certain non-GAAP financial measures, including adjusted.

Claire Adams: OIBDA adjusted OIBDA margin free cash flow and constant currency information regarding the comparable GAAP metrics, along with required definitions and reconciliations, including preliminary note and schedules one through three can be found in the earnings press release issued today for our earnings presentation, which are available on our website.

Claire Adams: Today speaking on the earnings call the acuity retail President and CEO, David Rawlinson here at retail group's CFO, Bill Rutherford and here at retail executive Chairman and Greg with that now I'll hand, the call over to David.

David Rawlinson: Thank you Claire and good morning to everyone. Thank you for joining us today and for your interest.

David Rawlinson: Thank you, Claire. And good morning to everyone.

David Rawlinson II: Thank you, Clare, and good morning to everyone. Thank you for joining us today and for your interest in Qurate Retail. In Q1, we continued to generate positive results as we executed our transformation strategies. In the past 18 to 24 months, we took actions to improve margins. We elevated our merchandise assortment, reduced supply chain and fulfillment costs by negotiating better rates, created operational efficiencies, and lowered administrative costs. These actions have resulted in continued margin expansion, profitability growth, and free cash flow improvement. In Q1, we sustained gross margin expansion up approximately 400 basis points, which was the fourth consecutive quarter of expansion. We grew consolidated adjusted OIBDA 45%, as reported, which was the third consecutive quarter of adjusted OIBDA growth. Each of our businesses grew gross margin and adjusted OIBDA in the quarter. We also improved free cash flow for the fifth consecutive quarter of year-on-year improvement.

David Rawlinson: Retail.

David Rawlinson: Thank you for joining us today and for your interest in Curate Retail. In Q1, we continued to generate positive results as we executed our transformation strategy. In the past 18-24 months, we took actions to improve margins. We improved our merchandise assortment, reduced supply chain and fulfillment costs by negotiating better rates, created operational efficiencies, and lowered administrative costs.

David Rawlinson: In Q1, we continued to generate positive results as we executed our transformation strategies in the past 18 to 24 months, we took actions to improve margins, we elevated our merchandize assortment and reduce supply chain and fulfillment costs by negotiating better rates created operational efficiencies.

David Rawlinson: <unk> and lowered administrative costs. These actions have resulted in continued margin expansion profitability growth and free cash flow improvement in.

David Rawlinson: These actions have resulted in continued margin expansion, profitability growth, and free cash flow improvement. In Q1, we sustained gross margin expansion of approximately 400 basis points, which was the fourth consecutive quarter of expansion. We grew consolidated adjusted OEBDOT by 45 percent, as reported, which was the third consecutive quarter of adjusted OEBDOT growth. Additionally, each of our businesses grew gross margin and adjusted OEBDOT in the quarter. We also improved free cash flow for the fifth consecutive quarter of year-on-year improvement.

David Rawlinson: In Q1, we sustained gross margin expansion of approximately 400 basis points, which was the fourth consecutive quarter of expansion. We grew consolidated adjusted OIBDA of 45% as reported which was the third consecutive quarter of adjusted OIBDA growth each of our businesses.

David Rawlinson: Group gross margin and adjusted OIBDA in the quarter. We also improved free cash flow for the fifth consecutive quarter of year on year improvement. We are pleased with our sustained momentum in the business through the first quarter.

David Rawlinson II: We are pleased with our sustained momentum in the business through Q1. Last month, we launched the QVC Age of Possibility, a new marketing initiative that is focused on celebrating our core customer, women over the age of 50. For this campaign, we brought together the Quintessential 50, our Q50, a group of 50 celebrities, activists, QVC hosts, and business leaders, including Christina Applegate, Brunch with Babs, Dr. Mary Claire Haver, Donna Kelce, Billie Jean King, Patti LaBelle, Queen Latifah, Martha Stewart, and Naomi Watts. QVC is partnering with these incredible women on programming, merchandise, and much more to inspire and empower women over 50. The Q50 ambassadors have a total social following of 78 million. Many of our Q50 who attended this event have already expressed interest in signing on with QVC in a larger capacity. I'll speak more to this initiative momentarily.

David Rawlinson: We are pleased with our sustained momentum in the business through the first quarter. Last month, we launched the QVC Age of Possibility, a new marketing initiative that is focused on celebrating our core customer, women over the age of 50. For this campaign, we brought together the quintessential 50, our Q50, a group of 50 celebrities, activists, QVC hosts, and business leaders, including Christina Applegate, Brunch with Babs, Dr. Mary Claire Hayter, Donna Kelsey, Billie Jean King, Patti LaBelle, Queen Latifah, Martha Stewart, and Naomi Watts.

David Rawlinson: Yeah.

David Rawlinson: Last month, we launched the QVC age a possibility a new marketing initiative that is focused on celebrating our core customer women over the age of 50, but this campaign, we brought together the quintessential 50 or <unk> 50, a group of 50 celebrities Actavis QVC.

David Rawlinson: And business leaders, including Christina Applegate Brunch with Babs, Dr. Mary Claire Haber, Dana Kelsey, Billie Jean King Patti Labelle, Queen Latifah, Martha Stewart and Naomi Watts QVC is partnering with these incredible women owned programming merchandize.

David Rawlinson: QVC is partnering with these incredible women on programming, merchandise, and much more to inspire and empower women over 50. The Q50 Ambassadors have a total social following of 78 million. Many of our Q50 Ambassadors who attended this event have already expressed interest in signing on with QVC in a larger capacity. I'll speak more about this initiative momentarily.

David Rawlinson: And much more to inspire and empower women over 50.

David Rawlinson: The Q 50 ambassadors have a total social following of $78 million. Many of our key 50, who attended this event have already expressed interest in signing on with QVC and our larger capacity I'll speak more to this initiative momentarily.

David Rawlinson II: Now allow me to elaborate on each of our businesses, starting with QXH. Revenue declined in line with the overall discretionary retail market. Consumers remained selective in their spending due to inflation and interest rate uncertainty. Given this, in the colder start to spring, we saw customers buying seasonal products closer to when they needed them, such as gardening, spring apparel, tanning, sandals, and swimwear. This resulted in uneven performance in these categories and in Today's Special Value and Today's Special Sales. Strength in other categories, such as intimates, fashion accessories, and jewelry, partially offset this pressure. We continue to benefit from new merchandise that is exciting our customers. We increased the number of new on-air items by 10%, and demand for new items outperformed the overall business.

David Rawlinson: Now allow me to excuse me now allow me to elaborate on each of our businesses starting with <unk> revenue declined in line with the overall discretionary retail market.

David Rawlinson: Now, allow me to, excuse me, now allow me to elaborate on each of our businesses, starting with QX. Revenue declined in line with the overall discretionary retail market. Consumers remain selective in their spending due to inflation and interest rate uncertainty. Given this, in the colder start to spring, we saw customers buying seasonal products closer to when they needed them, such as gardening, spring apparel, tanning, sandals, and swimwear. This resulted in uneven performance in these categories and in today's special value and today's special sales. Strength in other categories, such as intimates, fashion accessories, and jewelry, partially offset this pressure.

David Rawlinson: Consumers remain selective in their spending due to inflation and interest rate uncertainty given this and the colder start to spring, we saw customers buying seasonal products closer to when they needed them such as gardening spring apparel tanning sandals and swimwear. This.

David Rawlinson: <unk> and uneven performance in these categories and then today's special value in today's special sales strengthened other categories, such as intimates fashion accessories, and jewelry, partially offset this pressure.

David Rawlinson: We continue to benefit from new merchandise that is exciting our customers. We increased the number of new one era items about 10% and demand for new items outperformed the overall business. We had several successful brand launches, including CEVA XC Scarlett.

David Rawlinson: We continue to benefit from new merchandise that is exciting our customers. We increased the number of new on-air items by 10%, and demand for new items outperformed the overall business. We had several successful brand launches, including Givenchy, Scarlett Johansson's The Outset, Kim Gravel's Love Who You Are, and Kim Kibble's Full Hair and Beauty, McKenzie Child's At Home Decor, Coldwater Creek, and Grey by Johann Sebastian Grey and Apparel. While beauty revenue declined at QVC, we sustained strength in beauty at HSN. Now, let's review the Programming Highlights.

David Rawlinson II: We had several successful brand launches, including Givenchy, Scarlett Johansson's The Outset, Kim Gravel's Love Who You Are, and Kim Kimble's Faux Hair and Beauty, MacKenzie-Childs home décor, Coldwater Creek, and Gray by Johann Sebastian Gray in apparel. While beauty revenue declined at QVC, we sustained strength in beauty at HSN. Now let's review programming highlights. Total minutes viewed on our five channels remained steady in the quarter. Last year, we introduced the limited-run series Over 50 and Fabulous. We aired season three from February to early March and held the first-ever two-hour finale. Our customers continue to engage at high levels. The series reached an average of 481,000 households per hour on linear TV, making it one of our top-reaching primetime programs of the quarter. Total series sales exceeded $3 million. On social media, the series reached over 10 million followers with more than 18 million impressions.

David Rawlinson: Hansen, the outset, Kim Gabel Love, who you are and Kim Kibbles, both hair and beauty Mackenzie Childs at home decor, Coldwater Creek, and gray by Johann Sebastian Gray and apparel.

David Rawlinson: While beauty revenue declined at QVC, we sustained strength in beauty at HSN.

David Rawlinson: Now, let's review programming highlights total minutes viewed on a fob channels remained steady in the quarter last year, we introduced a limited run series over 50 and Fabulous we aired seasoned III from February to early March and held the first ever two hour finale.

David Rawlinson: Total minutes viewed on our five channels remain steady in the quarter. Last year, we introduced the limited-run series, Over 50 and Fabulous. We aired Season 3 from February to early March and held the first ever two-hour finale. Our customers continue to engage at high levels. The series reached an average of 481,000 households per hour on linear TV, making it one of our top-reaching prime time programs of the quarter. Total series sales exceeded 3 million.

David Rawlinson: Our customers continue to engage at high levels. The series reached an average of 481000 households per hour on linear television, making it one of our top reaching prime time programs of the quarter.

David Rawlinson: Total CRE sales exceeded $3 million on social media. The series reached over 10 million followers with more than 18 million impressions. The program continues to engage customers through our monthly livestream on the first Friday of every month and we play into <unk> four in early August.

David Rawlinson: On social media, the series reached over 10 million followers with more than 18 million impressions. The program continues to engage customers through a monthly live stream on the first Friday of every month, and we plan to air season four in early August.

David Rawlinson II: The program continues to engage customers through a monthly live stream on the first Friday of every month, and we plan to air season four in early August. We also held several successful events. In January, we aired a 24-hour event, Now You're Cooking, that was anchored by Le Creuset's Today's Special Value. The day included six hours of additional live stream content featuring several celebrities and food experts, including Carla Hall, Zephyr Teachout, and our own Vanessa Herring and Dave Venable. Over 3 million households tuned in to QVC throughout the day on linear TV, making it one of the highest Sundays for viewership in the quarter. For the first time since 2020, we focused a full day of programming on International Women's Day.

David Rawlinson: We also held several successful events in January we entered a 24 hour you bet now youre cooking that was anchored by late <unk> today's special value.

David Rawlinson: We also held several successful events. In January, we aired a 24-hour event, Now You're Cooking, that was anchored by Lake Crusade's Today Special Value. The day included six hours of additional live stream content featuring several celebrities and food experts, including Carla Hall, Jeffrey, excuse me, Zephry Zagatkaran, and our own Vanessa Herring and Dave Venable. Additionally, over three million households tuned in to QVC throughout the day on linear TV, making it one of the highest Sundays for viewership in the quarter.

David Rawlinson: They included six hours of additional livestream content, featuring several celebrities and food experts, including Carla Hall Jeffery.

David Rawlinson: I mean, <unk> got Karen and our.

David Rawlinson: One Vanessa here and they are available over 3 million households tuned into QVC throughout the day on linear television, making it one of the highest Sundays for viewership in the quarter.

David Rawlinson: For the first time since 2020, we focused a full day of programming on International Women's Day. We celebrated the accomplishments of women with a special focus on some of the entrepreneurs who inspire us, such as Amy Richter from L.U.G., Renee Greenstein from Women with Control, and Mally Roncal from Mally Color Cosmetics. This event reached nearly 2.5 million households throughout the day on linear TV.

David Rawlinson: For the first time since 2020, we focus a full day of programming on International Women's day, we celebrated the accomplishments of women with special focus on some of the entrepreneurs, who inspire us such as Amy Richter from Lug Rene Greenstein for women with control and Mali, one cow.

David Rawlinson II: We celebrated the accomplishments of women with special focus on some of the entrepreneurs who inspire us, such as Amy Richter from LUG, Renee Greenstein from Women With Control, and Mally Roncal from Mally Color Cosmetics. This event reached nearly 2.5 million households throughout the day on linear TV. We continue to stabilize the QxH customer file and grow the number of new customers. On a quarterly basis, QxH customer count declined 3%, compared to mid- to high-single-digit declines in the second half of 2023. On slide 8 of our presentation, you can see that our customer count has significantly stabilized. We've moderated the sequential decline of our trailing 12-month count down to less than 50,000 from Q1, compared to down over 300,000 for the same period last year. We continue to see strength in the purchasing behavior of our existing customers.

David Rawlinson: For Mali color cosmetics, let's say debt reached nearly $2 5 million households throughout the day on linear television.

David Rawlinson: We continue to stabilize the QXH customer volume and grow the number of new customers. On a quarterly basis, the QXH customer count declined 3% compared to mid-to-high single-digit declines in the second half of 2023. On slide 8 of our presentation, you can see that our customer count has significantly stabilized. We've moderated the sequential decline of our trailing 12-month count down to less than 50,000 from Q1, compared to down over 300,000 for the same period last year.

David Rawlinson: We continue to stabilize the <unk> customer file and grow the number of new customers on a quarterly basis <unk> customer count declined 3% compared to mid to high single digit declines in the second half of 2020 three on slide eight of our presentation, you can see that our customer count.

David Rawlinson: Has significantly stabilized we've moderated the sequential decline of our trailing 12 months count down to less than 50000 from Q1 compared to down over 300000 for the same period last year.

David Rawlinson: We continue to see strength in the purchasing behavior of our existing customers, while only comprising half of the customer count <unk> existing customers still account for 90% of the total spin on average they purchased 32 items and spent more than $600 in the 12 months ended March.

David Rawlinson: We continue to see strength in the purchasing behavior of our existing customers. While only comprising half of the customer count, QXH existing customers still account for 90% of the total spend. On average, they purchased 32 items and spent more than $1,600 in the 12 months ended March 31st, 6% and 10% year over year, respectively.

David Rawlinson II: While only comprising half of the customer count, QXH existing customers still account for 90% of the total spend. On average, they purchased 32 items and spent more than $1,600 in the 12 months ended March 31, of 6% and 10% year-over-year, respectively. QXH grew new customers 23% in Q1, marking the third consecutive quarter of new customer growth. We also saw new customer growth on a trailing 12-month basis, for the first time since the pandemic ended, with new customers up 7% in the 12 months ended March 31. I will now touch on streaming. Our streaming business is still small but growing well. Revenue, total minutes viewed, and monthly average users all increased well into the double digits in Q1. We anticipate similar growth rates for the full year.

David Rawlinson: 31 of 6% and 10% year over year, respectively.

David Rawlinson: QXH grew new customers 23% in Q1, marking the third consecutive quarter of new customer growth. We also saw new customer growth on a trailing 12-month basis for the first time since the pandemic ended, with new customers up 7% for the 12 months ended March 31st. I will now touch on the street.

David Rawlinson: <unk> grew new customers, 23% in Q1, marking the third consecutive quarter of new customer growth. We also saw new customer growth on a trailing 12 month basis, but the first time since the pandemic ended with new customers up 7% in the 12 months ended March <unk>.

David Rawlinson: The one.

David Rawlinson: I will now touch on Australia.

David Rawlinson: Our streaming business is still small, but growing well revenue total minutes viewed and monthly average users all increase well into the double digits. In Q1, we anticipate similar growth rates for the full year. We're excited to announce that New York times best selling author Actavis.

David Rawlinson: Our streaming business is still small, but growing well. Revenue, total minutes viewed, and monthly average users all increased well into the double digits in Q1. We anticipate similar growth rates for the full year.

David Rawlinson II: We're excited to announce that New York Times bestselling author, activist, actor, and writer, Busy Philipps, who has more than 2 million followers on Instagram, is returning to late night to host the talk show Busy This Week, exclusively on our QVC+ streaming platform. She's bringing celebrity interviews, laugh-out-loud moments, personal stories, and her favorite curated shopping finds. The show will premiere tonight at 10:00PM Eastern. The show will premiere tonight at 10:00PM Eastern. The first 10 episodes will be released weekly, and we will air four holiday-themed episodes in November and December. Busy's show will be a shop-the-set, shop-the-look series, which means everything you see on the show, such as clothing, decor, and props, is easily shoppable on QVC.com. Now moving to QVC International, which continues to be our most consistent business unit. We have grown adjusted OIBDA and delivered stable revenue for three consecutive quarters.

David Rawlinson: We're excited to announce that New York Times bestselling author, activist, actor, and writer Busy Phillips, who has more than 2 million followers on Instagram, is returning to late night to host a talk show, Busy This Week, exclusively on our QVC Plus streaming platform. She's bringing celebrity interviews, laugh-out-loud moments, personal stories, and her favorite curated shopping fun. The show will premiere tonight at 10 p.m. Eastern.

David Rawlinson: Actor and writer busy Phillips, who has more than 2 million followers on Instagram is returning to late night to host the talk show busy this week exclusively on our TBC plus streaming platform. She is bringing celebrity interviews laugh out loud moments personal stories.

David Rawlinson: And her favorite curated shopping box the show will premiere Tonight at <unk> P M Eastern.

David Rawlinson: The show will premiere Tonight at <unk> P M eastern.

David Rawlinson: The first 10 episodes will be released weekly, and we will air four holiday-themed episodes in November and December. Busy Show will be a shop-the-set, shop-the-look series, which means everything you see on the show, such as clothing, decor, and props, is easily shoppable on qbc.com. Now moving to QVC International, which continues to be our most consistent business unit. We have grown AdjustedOIDA and delivered stable revenue for three consecutive quarters. These results reflect our successful efforts to improve product margins, lower fulfillment and administrative expenses, and incubate growth streams like integrated experiences, which we previously discussed.

David Rawlinson: First 10 episodes will be released weekly.

David Rawlinson: And we will air for holiday themed episodes in November and December busy show will be a shop that shop. The look series, which means everything you see on the show such as clothing. The corn crops is easily solvable on PVC dot com.

David Rawlinson: Now moving to QVC International which continues to be our most consistent business unit, we have grown adjusted OIBDA and delivered stable revenue for three consecutive quarters. These results reflect our successful efforts to improve product margins lower fulfillment and administrative expenses and incubate growth.

David Rawlinson II: These results reflect our successful efforts to improve product margins, lower fulfillment and administrative expenses, and incubate growth excuse me, incubate growth streams like integrated experiences, which we've previously discussed. QVC International's Q1 revenue declined slightly, down 1%. Performance was led by our operations in the UK, which experienced gains across its merchandise assortment, with demand growth in all categories and particular strength within home. The sales growth in the UK, combined with gross margin expansion and disciplined management of operating and administrative expenses, resulted in strong adjusted OIBDA improvement. QVC UK's Integrated Experience Initiative, which is focused on gardening, generated incremental sales, customers, and spend per customer in Q1. In Q2, QVC UK will conduct testing and learnings to scale its integrated experience.

David Rawlinson: Excuse me incubate growth screams like integrated experiences, which we've previously discussed.

David Rawlinson: QVC International's Q1 revenue declined slightly, down 1%. However, performance was led by our operations in the U.K., which experienced gains across its merchandise assortment with demand growth in all categories and particular strength within homes. The sales growth in the U.K., combined with gross margin expansion and a disciplined management of operating and administrative expenses, resulted in strong adjusted OEBDA improvements.

David Rawlinson: QVC International Q1 revenue declined slightly down 1% pro.

David Rawlinson: Performance was led by our operations in the UK, which experienced gains across its merchandise assortment with demand growth in all categories and particular strip with at home.

David Rawlinson: Sales growth in the U K combined with gross margin expansion and disciplined manage of operating and administrative expenses resulted in strong adjusted OIBDA improvement Tvs.

David Rawlinson: QVC UK's Integrated Experience Initiative, which is focused on gardening, generated incremental sales, customers, and spend per customer in Q1. In Q2, QVC-UK will conduct testing and learnings to scale its integrated experience. These actions include deploying an AI shopping assistant to increase discoverability of content and give customer advice, participating at the BBC Gardeners World Live event, and partnering with our vendors to bring customers winning flower varieties from the Chelsea Flower Show. Moving to Cornerstone, revenue declined due to soft housing starts and consumer demand for home furnishings.

David Rawlinson: QVC U K integrated experience initiative, which is focused on gardening generated incremental sales customers and spend per customer in Q1.

David Rawlinson: In Q2, QVC U K will conduct testing and learnings to scale. Its integrated experience. These actions include deploying an AI shopping assistant to increase discover ability of content and give customer advice participating at the BBC gardeners worldwide vivat and partner.

David Rawlinson II: These actions include deploying an AI shopping assistant to increase discoverability of content and give customer advice, participating at the BBC Gardeners World Live event, and partnering with our vendors to bring customers winning flower varieties from the Chelsea Flower Show. Moving to Cornerstone. Cornerstone revenue declined due to soft housing starts and consumer demand for home furnishings. We also experienced a shift to lower-ticket products, such as textiles and decor, in light of the challenging macro backdrop. Cornerstone remained focused on profitability and grew gross margin 410 basis points in Q1, which was fueled by lower supply chain costs. Finally, I would like to close with the exciting new initiative we launched in April, The Age of Possibility, to celebrate the limitless potential of women over the age of 50. For nearly four decades, QVC has served Women 50 Plus as our core customer group.

David Rawlinson: Partnering with our vendors to bring customers winning flower varieties from the Chelsea flower show.

David Rawlinson: Moving to cornerstone.

David Rawlinson: Cornerstone revenue decline due to soft housing starts and consumer demand for home furnishings. We also experienced a shift to lower ticket products such as textiles in the core in light of the challenging macro backdrop.

David Rawlinson: We also experienced a shift to lower-ticket products such as textiles and decor in light of the challenging macro backdrop. However, Cornerstone remained focused on profitability and grew gross margin by 410 basis points in Q1, which was fueled by lower supply chain costs.

David Rawlinson: <unk> remained focused on profitability and grew gross margin 410 basis points in Q1, which was fueled by lower supply chain costs. Finally.

David Rawlinson: Finally, I would like to close with the exciting new initiative we launched in April, the Age of Possibilities, to celebrate the limitless potential of women over the age of 50. For nearly four decades, QVC has served women 50 plus as our core customer. This demographic has high discretionary income and controls 95% of household purchase decisions.

David Rawlinson: I would like to close with the exciting new initiatives, we lost launched in April the age of possibility.

David Rawlinson: To celebrate the limitless potential of women over the age of 50.

David Rawlinson: For nearly four decades QVC has served women 50, plus as our core customer viewer.

David Rawlinson II: This demographic has high discretionary income and controls 95% of household purchase decisions. Women 50 Plus are also a large population, with approximately 64 million in the US, and the population is growing twice as fast as the 20 to 49 group. However, Women 50 Plus are overlooked by brands and marketers. We conducted a survey of over 3,700 respondents and found that only 31% of women ages 50 to 70 feel supported by brands. Even fewer feel visible in brand marketing and advertising. These women are often made to feel that society views entering 50 as a stage of decline.

David Rawlinson: This demographic has high discretionary income and controls 95% of household purchase decisions women 50, plus are also a large population with approximately $64 million in the U S and the population is growing twice as fast as the 20% to 49 group however, when.

David Rawlinson: Women 50 plus are also a large population, with approximately 64 million in the U.S., and the population is growing twice as fast as the 20 to 49 group. However, women 50 plus are overlooked by brands and marketers. We conducted a survey of over 3,700 respondents and found that only 31 percent of women ages 50 to 70 feel supported by brands. Even fewer feel visible in brand marketing and advertising.

David Rawlinson: <unk> 50, plus or overlooked by brands and marketers, we conducted a survey of over 3700 respondents and found that only 31% of women ages 50 to 70 deals supported by brands, even fewer visible and brand marketing and advertising. These women are often made to feel that society.

David Rawlinson: These women are often made to feel that society views entering 50 as a stage of decline. To reverse this misconception, we've gathered a powerful group called the Quintessential 50, or Q50, comprising 50 modern women over the age of 50 that include celebrities, activists, QVC hosts, entrepreneurs, business leaders, and extraordinary everyday people who have no plans to slow down, and they're living their next chapter in all sorts of inspiring ways. With the age of possibility, these women will provide input and tell their stories through curated new merchandise, on-air programming, remote broadcast, social media content, podcasts, advertising, and national publications such as U.S. Weekly and Woman's World and Vogue, as well as in targeted growth markets on radio, YouTube, meta, out of home, and display.

David Rawlinson: He views entering 50 at this stage of the cloud.

David Rawlinson II: To reverse this misconception, we've gathered a powerful group called the Quintessential 50, or Q50, comprising 50 modern women over the age of 50 that include celebrities, activists, QVC hosts, entrepreneurs, business leaders, and extraordinary everyday people who have no plans to slow down and they're living their next chapter in all sorts of inspiring ways. With The Age of Possibility, these women will provide input and tell their stories through curated new merchandise, on-air programming, remote broadcast, social media content, podcasts, advertising, and national publications such as US Weekly, Woman's World, and Vogue, as well as in targeted growth markets on radio, YouTube, Meta, Out of Home, and Display.

David Rawlinson: To reverse this misconception we've gathered a powerful group called the quintessential 50 or 50 comprised of 50 modern women over the age of 50 that includes celebrities Actavis QVC host entrepreneur business leaders and extraordinary everyday people, who have no plans to slow.

David Rawlinson: Down and they're living their next chapter and all sorts of inspiring ways with the age of possibility. These women will provide input and tell their stories through curated new merchandise on air programming remote broadcast social media content podcast advertising in national public.

David Rawlinson: Patients such as U S weekly and woman's World and Vogue as well as in targeted growth markets on radio Youtube net out of home and display.

David Rawlinson: In late April, QVC convened a first-of-its-kind summit at the SPHERE in Las Vegas' Grand Prix Plaza, bringing together our 250 brand ambassadors for a day of compelling conversations on this next stage of growth, including keynote speeches on navigating menopause and Rita Wilson's first performance of her new song, Set You Free. Coverage of the event was broadcast across QVC channels and across social platforms. And the weekend after launch, the new customer count grew 110% compared to the same weekend in the year prior.

David Rawlinson II: In late April, QVC convened a first-of-its-kind summit at The Sphere and Las Vegas Grand Prix Plaza, bringing together our Q50 brand ambassadors for a day of compelling conversations on this next stage of growth, keynote speeches on navigating menopause, and Rita Wilson's first-time performance of her new song, Set You Free. Coverage of the event was broadcasted across our QVC channels and across social platforms. In the weekend after launch, new customer count grew 110% compared to the same weekend in the year prior. This month, we're starting The Age of Possibility tour to further engage our existing customers and attract prospective customers. We're taking our show on the road to cities across the country. In some destinations, we will broadcast live. In others, we will conduct panel discussions with some of our Q50 brand ambassadors and customers.

David Rawlinson: In late April QVC and being the first of its kind summit at the sphere in Las Vegas Grand Prix Plaza.

David Rawlinson: Bringing together, our chief 50 brand ambassadors for a day of compelling conversations on this next stage of growth keynote speeches on navigating menopause and Rita Wilson's first time performance of her new song set you free.

David Rawlinson: Coverage of the event was broadcasted across our PVC channels and across social platforms and the weekend after launch new customer count grew 110% compared to the same weekend and the year prior.

David Rawlinson: This month, we're starting the Age of Possibility Tour to further engage our existing customers and attract prospective customers. We're taking our show on the road to cities across the country, and at some destinations, we will broadcast live, and others, we will conduct panel discussions with some of our Q50 brand ambassadors and customers. We are excited about our mission to lead the way in changing how retail and entertainment see women over 50 as empowered and full of possibility.

David Rawlinson: This month, we're starting to age a possibility tour to further engage our existing customers and attract prospective customers were taking our show on the road to cities across the country and some destinations we will broadcast live and others. We will conduct panel discussions with some of our key 50 brand ambassadors and customers we.

David Rawlinson II: We are excited about our mission to lead the way in changing how retail and entertainment see women over 50, empowered and full of possibility. In conclusion, Q1 showed the relevance, star power, and new customer momentum in our brands, and it is still early. Now I'll turn the call to Bill to discuss the financial results of each of our businesses in more detail.

David Rawlinson: We are excited about our mission to lead the way in changing how retail and entertainment see women over 50 empowered and full of possibilities.

Speaker Change: In conclusion.

David Rawlinson: In conclusion, Q1 showed relevant star power and new customer momentum in our brand, and it is still early. Now I'll turn the call over to Bill to discuss the financial results of each of our businesses in more detail.

Speaker Change: Q1 showed the relevance star power and new customer momentum in our brands and it is still early.

Speaker Change: Now I'll turn the call to bill to discuss the financial results of each of our businesses in more detail.

Bill Wofford: Unless otherwise noted, my comments compare financial performance for the three months ended March 31st, 2024 to the same period in 2023, starting with QXH. Revenue declined 4% primarily due to lower unit volume, which was partially offset by favorable returns and higher shipping and handling revenue. From a category perspective, QXH experienced growth in accessories and jewelry, which was offset by declines mainly in home and apparel.

Bill Rutherford: Thank you David and good morning, everyone.

Bill Wafford: Thank you, David, and good morning, everyone. Unless otherwise noted, my comments compare financial performance for the three months ended 31 March 2024, to the same period in 2023. Starting with QXH, revenue declined 4% primarily due to lower unit volume, which was partially offset by favorable returns and higher shipping and handling revenue. From a category perspective, QXH experienced growth in accessories and jewelry, which were offset by declines mainly in home and apparel. Accessories grew 5%, largely due to higher demand for intimates and fashion accessories, partially offset by softness in non-leather handbags and seasonal footwear. Jewelry grew 4%, mainly as a result of strength in gold, silver, and diamond jewelry, including a successful Today's Special Value of Firelight Lab-Grown Diamond. Home revenue decreased 7%, primarily due to the colder start to the spring causing low demand for gardening and outdoor decor.

Bill Rutherford: Unless otherwise noted my comments compare financial performance for the three months ended March 31, 2024 for the same period in 2023.

Bill Rutherford: Starting with <unk> X H revenue declined 4%, primarily due to lower unit volume, which was partially offset by favorable returns and higher shipping and handling revenue.

Bill Wofford: Accessories grew 5%, largely due to higher demand for intimates and fashion accessories, partially offset by softness in non-leather handbags and seasonal footwear. Jewelry grew 4%, mainly as a result of strength in gold, silver, and diamond jewelry, including a successful Today's Special Value of Firelight Lab-Grown Diamond.

Bill Rutherford: From a category perspective, <unk> experienced growth in accessories, and jewelry, which were offset by declines mainly in home and apparel.

Bill Rutherford: Accessories grew 5% largely due to higher demand for intimates and fashion accessories, partially offset by softness in non leather handbags and seasonal footwear.

Bill Rutherford: Jewelry grew 4%, mainly as a result of strength in gold silver and diamond jewelry, including a successful today's special value of fire light lab grown diamonds.

Bill Rutherford: Home revenue decreased 7%, primarily primarily due to the colder start to the spring and causing low demand for gardening and outdoor decor. This was partially offset by strength in indoor decor and culinary.

Bill Wofford: Home revenue decreased 7% primarily due to the colder start to spring, causing low demand for gardening and outdoor decor. This was partially offset by strength in indoor decor and culinary. Apparel declined 4% due to soft demand for spring apparel and swimwear. Beauty declined 3%, reflecting lower demand for beauty devices and bath and body, partially offset by growth in hair care.

Bill Wafford: This was partially offset by strength in indoor decor and culinary. Apparel declined 4% due to soft demand for spring apparel and swimwear. Beauty declined 3%, reflecting lower demand for beauty devices and bath and body, partially offset by growth in haircare. Adjusted OIBDA margin increased 330 basis points. Gross margin expanded 360 basis points, mainly driven by strong product margins and favorable fulfillment expense. Product margins increased 200 basis points due to higher margin products driven by improved inventory health with less liquidation compared to last year, as well as lower supply chain costs due to Project Athens initiatives. Fulfillment expenses improved 160 basis points due to efficiencies from Project Athens workstreams, reduced freight rates, and lowered detention and demurrage. SG&A was unfavorable by approximately 35 basis points, largely due to sales deleverage and higher marketing expenses, partially offset by lower administrative costs.

Bill Rutherford: Apparel declined 4% due to soft demand for spring apparel and swimwear.

Bill Rutherford: Beauty declined 3%, reflecting lower demand for beauty devices, and Bath and body, partially offset by growth in hair care.

Bill Rutherford: Adjusted OIBDA margin increased 330 basis points gross margin.

Bill Wofford: Adjusted OEVDA margin increased 330 basis points, and Gross Margin expanded 360 basis points, mainly driven by strong product margins and favorable fulfillment economy conditions. Product margins increased 200 basis points due to higher-margin products driven by improved inventory health, with less liquidation compared to last year, as well as lower supply chain costs due to Project Athens. Fulfillment expenses improved 160 basis points due to efficiencies from Project Athens work streams, reduced freight rates, and lowered detention and demerit.

Bill Rutherford: <unk> expanded 360 basis points, mainly driven by strong product margins and favorable fulfillment expense.

Bill Rutherford: Product margins increased 200 basis points due to higher margin products, driven by improved inventory health with less liquidation compared to last year as well as lower supply chain costs due to project athans initiatives.

Bill Rutherford: Fulfillment expenses improved 160 basis points due to efficiencies from project Athens work streams reduce freight rates and lower detention and demurrage.

Bill Wofford: SG&A was unfavorable by approximately 35 basis points, largely due to sales deleverage and higher marketing expenses, partially offset by lower administrative costs. Marketing expenses increased mainly due to the normalization of the annual spend compared to last year.

Bill Rutherford: SG&A was unfavorable by approximately 35 basis points, largely due to sales deleverage and higher marketing expenses, partially offset by lower administrative costs.

Bill Wafford: Marketing expenses increased mainly due to normalization of the annual spend compared to last year. Administrative expenses declined primarily due to lower costs for outside services related to Project Athens. Moving to QVC International, my comments will focus on constant currency results. Revenue declined 1%. QVC UK and Japan grew revenue in the high single and low single digits, respectively. Germany declined mid to high single digits. From a category perspective, QVC International experienced growth in home and declines largely in jewelry and apparel. Adjusted OIBDA increased 10%, and adjusted OIBDA margin expanded 90 basis points. Gross margin expanded 70 basis points, mainly due to improved product margins, which reflect lower returns, higher initial margins, and higher shipping and handling revenue. SG&A was favorable primarily due to lower administrative costs. Moving to Cornerstone. Revenue declined 11% in the quarter.

Bill Rutherford: Marketing expenses increased mainly due to normalization of the annual spend compared to last year.

Bill Wofford: Administrative expenses declined primarily due to lower costs for outside services related to Project F. Moving to QVC International, my comments will focus on constant currency results. Revenue declined 1%. QVC UK and Japan grew revenue in the high single and low single digits, respectively. Germany declined in the mid to high single digits.

Bill Rutherford: Administrative expenses declined primarily due to lower costs for outside services related to project Athens.

Bill Rutherford: Moving to QVC International My comments will focus on constant currency results.

Bill Rutherford: Revenue declined 1%.

Bill Rutherford: <unk> U K and Japan grew revenue in the high single and low single digits respectively.

Bill Wofford: Germany declined mid to high single digits.

Bill Rutherford: From a category perspective, QVC international experience growth in home and declines largely in jewelry and apparel.

Bill Wofford: From a category perspective, QVC International experienced growth in home and declines largely in jewelry and apparel. Adjusted OEBDA increased 10%, and adjusted OEBDA margin expanded 90 basis points. Gross margin expanded 70 basis points, mainly due to improved product margins, which reflect lower returns, higher initial margins, and higher shipping and handling revenue. SG&A was favorable primarily due to lower administrative costs related to Moving to Cornerstone. Revenue declined 11% in the quarter. We experienced soft demand in most home categories and for apparel at Carnot Hill.

Bill Rutherford: Adjusted OIBDA increased 10% and adjusted OIBDA margin expanded 90 basis points.

Gross margin expanded 70 basis points, mainly due to improved product margins, which reflect lower returns higher initial margins and higher shipping and handling revenue.

Bill Wofford: SG&A was favorable primarily due to lower administrative costs.

Bill Rutherford: Moving to cornerstone.

Bill Wofford: Despite the revenue decline, Cornerstone grew Adjusted Orbita 50%. This performance was primarily due to favorable supply chain costs from lower ocean shipping rates, distribution center costs, and large packet surcharges partially offset by deleverage of marketing and administrative expenses, turning the cash flow into balance. In Q1, capital expenditures were $40 million, and we spent $2 million on TV distribution contract renewal. Our TV distribution payments can fluctuate year-over-year depending on renewal cycles, though we continue to expect the two-year average to be approximately $100 million. In Q1, free cash flow was a use of $27 million compared to a use of $70 million last year.

Bill Rutherford: Revenue declined 11% in the quarter.

Bill Wafford: We experienced soft demand in most home categories and for apparel at Garnet Hill. Despite the revenue decline, Cornerstone grew Adjusted OIBDA 50%. This performance was primarily due to favorable supply chain costs from lower ocean and shipping rates, distribution center costs, and large packet surcharges, partially offset by deleverage of marketing and administrative expenses. Turning to cash flow and the balance sheet. In Q1, capital expenditures were $40 million, and we spent $2 million on TV distribution contract renewals. Our TV distribution payments can fluctuate year-over-year depending on renewal cycles, though we continue to expect the two-year average to be approximately $100 million. In Q1, free cash flow was a use of $27 million compared to a use of $70 million last year.

Bill Rutherford: We experienced soft demand and most home categories and for apparel at Garnet Hill.

Bill Wofford: Despite the revenue decline cornerstone grew adjusted OIBDA of 50%.

Bill Rutherford: This performance was primarily due to favorable supply chain costs from lower Ocean shipping rates distribution center costs, and large packaged surcharges, partially offset by deleverage of marketing and administrative expenses.

Bill Rutherford: Turning to cash flow and the balance sheet.

Bill Rutherford: In Q1 capital expenditures were $40 million, and we spent $2 million on television distribution contract renewals.

Bill Wofford: Our TV distribution payments can fluctuate year over year, depending on renewal cycles, though we continue to expect the two year average to be approximately $100 million.

Bill Wofford: In Q1 free cash flow was a use of $27 million compared to a use of $70 million last year the.

Bill Wafford: The year-over-year improvement was attributable to improved cash flow from operations, driven by adjusted OIBDA gains, as well as lower capital expenditures and payments for TV distribution rights, partially offset by the comping of insurance proceeds from the Rocky Mount fire. We continue to expect higher adjusted OIBDA and lower TV distribution payments to benefit free cash flow in 2024. Looking at our debt profile. In March, we redeemed all remaining $423 million of principal outstanding of the QVC 4.85% senior secured notes due in 2024. We funded the redemption with drawing under the QVC revolver. As of 31 March 2024, we had $1.3 billion drawn on the QVC revolver with $1.9 billion in available capacity. Qurate Retail had total cash of $1.1 billion, of which $311 million was at QVC Inc., $464 million at Liberty Interactive, LLC, and $248 million was at Qurate Retail, Inc.

Bill Wofford: The year-over-year improvement was attributable to improved cash flow from operations driven by adjusted OIVD gains, as well as lower capital expenditures and payments for TV distribution rights, partially offset by the comping of insurance proceeds from the Rocky Mountain Farm. We continue to expect higher adjusted OIBDA and lower TV distribution payments to benefit free cash flow in 2025, looking at our debt profile. In March, we redeemed all remaining $423 million of principal outstanding on the QVC 4.85% senior secured notes due in 2025.

Bill Wofford: The year over year improvement was attributable to improved cash flow from operations driven by adjusted OIBDA gains as well as lower capital expenditures and payments for TV distribution rights, partially offset the comping of insurance proceeds from the Rocky Mount fire.

Bill Wofford: We continue to expect higher adjusted OIBDA, and lower TV distribution payments to benefit free cash flow in 2024.

Bill Wofford: Looking at our debt profile.

Bill Wofford: In March we redeemed all remaining $423 million of.

Bill Wofford: We'll outstanding of the QVC for eight 5% senior secured notes due in 2024, we funded the redemption with drawing under the QVC revolver.

Bill Wofford: We funded the redemption with drawing under the QVC revolver. As of March 31st, 2024, we had $1.3 billion drawn on the QVC revolver with $1.9 billion in available capacity. Curate Retail had total cash of $1.1 billion, of which $311 million was at QVC, Inc., $464 million at Liberty Interactive, LLC, and $248 million was at Curate Retail. Our leverage ratio, as defined by the QVC Revolving Credit Facility, was 2.5 times. Please note that Covenant Oivida includes the adjusted Oivida of QVC Ink and Cornerstone and a portion of the projected cost.

Bill Wofford: As of March 31, 2024, we had $1 3 billion drawn on the <unk> revolver was $1 9 billion in available capacity.

Bill Wofford: Curate retail had total cash of $1 1 billion of which $311 million was at QVC, Inc. 400, $464 million at Liberty Interactive LLC and $248 million was it Q right retailing.

Bill Wafford: Our leverage ratio, as defined by the QVC revolving credit facility, was 2.5 times. Please note that Covenant OIBDA includes the adjusted OIBDA of QVC Inc. and Cornerstone, and a portion of the projected cost savings. The stated leverage was slightly above the 2.31 leverage ratio due to certain add-backs no longer impacting the calculation, though these add-backs were largely offset by adjusted OIBDA growth. In the past two years, we implemented programs to improve our liquidity and successfully execute our transformation plan. We affirm that our debt level is manageable, and our current cushion is sufficient in relation to the 4.5 times maximum net leverage covenant threshold stipulated in our credit facility. In Q1, we sustained momentum and generated strong profitability growth and free cash flow improvement. We look forward to building on our progress the remainder of the year.

Bill Wofford: Our leverage ratio as defined by the <unk> revolving credit facility was two five times.

Bill Wofford: Please note that covenant OIBDA includes the adjusted OIBDA of QVC, Inc, and cornerstone and a portion of the projected cost savings.

Bill Wofford: The stated leverage was slightly above the $1231,000 leverage ratio due to certain add-backs no longer impacting the calculation, though these add-backs were largely offset by adjusted OIBDA growth. In the past two years, we implemented programs to improve our liquidity and successfully execute our transformation plan. We affirmed that our debt level is manageable, and our current cushion is sufficient in relation to the 4.5 times maximum net leverage covenant threshold stipulated in our credit facility.

Bill Wofford: The stated leverage was slightly above the 12 31 <unk>.

Bill Wofford: Leverage ratio due to certain add backs no longer impacting the calculation, though these add backs were largely offset by adjusted OIBDA growth.

Bill Wofford: In the past two years, we implemented programs to improve our liquidity and successfully execute our transformation plan, we affirmed that our debt level is manageable and our current tuition is sufficient in relation to the four five times maximum net leverage covenant threshold stipulated in our credit facility.

Bill Wofford: In the first quarter, we sustained momentum and generated strong profitability growth and free cash flow improvement, we look forward to building on our progress the remainder of the year.

Bill Wofford: In the first quarter, we sustained momentum and generated strong profitability growth and free cash flow improvement. We look forward to building on our progress through the remainder of the year.

Bill Wafford: With that, I'll turn the call over to Greg.

Bill Wofford: With that I'll turn the call over to Greg.

Speaker Change: Thanks Bill.

Greg Maffei: Thanks, Bill. That was another quarter of sustained and improved financial performance at Qurate, the third consecutive quarter of OIBDA growth, and a continuing of the moderation of revenue decline. We are excited about The Age of Possibility launch and believe the iconic ambassadors, including Billie Jean King, Queen Latifah, and our very own can't believe she's really 50, Renee Wilm, will help unlock the opportunities across the multi-platform business. We remain confident in the execution of the turnaround and the trajectory of the business. We expect Qurate to sustain free cash flow improvement throughout the year. We remain focused on the balance sheet and addressing the near-term maturities. It was noted we repaid the outstanding QVC notes due this year, and we continue to assess incremental opportunities to improve the balance sheet. And with that, operator, we'll open the line up for questions. Thank you.

David Rawlinson: It was another quarter of sustained and improved financial performance at Charate. The third consecutive quarter of orbit of growth and a continuing moderation of revenue decline. We are excited about the Age of Possibility launch and believe the iconic ambassadors, including Billie Jean King, Queen Latifah, and our very own, can't believe she's really 50, Renee Wilm, will help unlock the opportunities across the multiplatform.

Bill Wofford: That was another quarter of sustained and improved financial performance at <unk>.

David Rawlinson: The third consecutive quarter of OIBDA growth.

David Rawlinson: And a continuing of the moderation of revenue decline.

David Rawlinson: We are excited about the age of possibility launch and believe the iconic ambassadors, including Billie Jean King Queen Latifah and our very own can't believe she is really 50, Renee will will help unlock the opportunities across the multi platform business.

David Rawlinson: We remain confident in the execution of the turnaround and the trajectory of the business.

David Rawlinson: We remain confident in the execution of the turnaround and the trajectory of the business. We expect Curate to sustain free cash flow improvement throughout the year. We remain focused on the balance sheet and addressing the near-term maturities, noted we will repay the outstanding QVC notes due this year, and we continue to assess incremental opportunities to improve the balance sheet. With that, Operator, we'll open the line up for questions. Thank you.

David Rawlinson: We expect curated sustained free cash flow improvement throughout the year.

David Rawlinson: We remain focused on the balance sheet and addressing the near term maturities.

David Rawlinson: As noted we repaid the outstanding QVC notes due this year and we didn't do what SaaS incremental opportunities to improve the balance sheet.

David Rawlinson: And with that operator, we'll open the lineup for questions. Thank you.

Speaker Change: Thank you will.

Bill Wafford: Thank you. We'll now be conducting a question-and-answer session. If you'd like to ask a question at this time, please press star one from your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Thank you. And our first question comes from the line of Carla Casella with JP Morgan. Please receive their questions.

Operator: Thank you. We'll now be conducting a question-and-answer session. If you'd like to ask a question at this time, please press star one from your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Thank you. And our first question comes from the line of Carla Casella with JP Morgan. Please receive their questions.

Speaker Change: I'll now be conducting a question and answer session if.

Operator: Thank you. If you would like to ask a question at this time, please press Star 1 from your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press Star 2 if you would like to remove your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

David Rawlinson: If you'd like to ask a question at this time. Please press star one from your telephone keypad.

Operator: A confirmation tone will indicate your line is in the question queue.

Operator: You May press star two if you'd like to remove your question from the queue.

Operator: For participants that are using speaker equipment may be necessary to pick up your handset before pressing the star keys.

Operator: One moment, please, while we poll for questions. Thank you. And our first question comes from the line of Carla Casella with J.P. Morgan. Please answer their questions. Hi.

Operator: One moment, please while we poll for questions.

Operator: Thank you and our first question comes from the line of Carla Casella with Jpmorgan. Please proceed with your questions.

Carla Casella: Hi, thank you for taking the question, and thanks for the color. It's good to see the customer accounts starting to inflect more positively across a couple of the different categories. But I'm wondering if you could give us more color on the average spend of the customers. I know during Investor Day you talked about the best customers spending $3,800. Today you said over $1,600 for the existing customers. Is there any other details you can give between the new, existing, reactivated customers or if you're seeing any change in the transition? Are you still seeing the same number of new customers ultimately become better as what you had seen in the past?

[Operator 2]: Hi. Thank you for taking the question. And thanks for the color, and it's good to see the customer accounts starting to inflect more positively across a couple of the different categories. But I'm wondering if you could give us more color on the average spend of the customers. I know during the Investor Day, you talked about the best customers spend $3,800. Today, you said over $1,600 for the existing. Is there any other details you can give between the new, existing, reactivated, or if you're seeing any change in the transition? Are you still seeing the same number of new customers ultimately become best as what you had done in the past as what you'd seen in the past?

Carla Casella: Hi. Thank you for taking the question. And thanks for the color, and it's good to see the customer accounts starting to inflect more positively across a couple of the different categories. But I'm wondering if you could give us more color on the average spend of the customers. I know during the Investor Day, you talked about the best customers spend $3,800. Today, you said over $1,600 for the existing. Is there any other details you can give between the new, existing, reactivated, or if you're seeing any change in the transition? Are you still seeing the same number of new customers ultimately become best as what you had done in the past as what you'd seen in the past?

Carla Casella: Hi, Thank you for taking the question and thanks for the color and it's good to see the customer accounts.

Carla Casella: Starting to inflect more positively across a couple of different categories, but I'm wondering if you could give us more color on the average spend of the customers I know during the Investor Day, you talked about the best customers send $3800.

Carla Casella: Today, you said over six 1600 for the existing is there any other details you can give between like the new existing reactivated and or if youre seeing any change in the transition like this are.

Carla Casella: Are you still seeing the same number of new customers ultimately become best as what you had done in the past as what you had seen in the past.

Carla Casella: Excellent.

David Rawlinson: Excellent. Thank you, Carl.

David Rawlinson II: Excellent. Thank you, Carla. I appreciate the question. I would say so let me just run through some numbers just to give a little more detail, and then I'll give some more color. So for QVC best customers, keep in mind these are customers that purchase over 20 items a year. Yeah, they're about 17% of the count and 76% of sales. And we felt good through the quarter about their spend retention and their frequency. And average spend for the quarter for those best customers was up about 7% on a trailing 12-month basis, about 3% on a quarterly, year-over-year basis. So our best customers are still performing very well. Going back to the total overall performance of existing customers, and existing customers are a broader subsection, so they're about 50% of the count and 90% of the sales. They purchased on average 32 items.

Speaker Change: Thank you Carl I appreciate that I appreciate the question.

Speaker Change: I would say.

David Rawlinson: I appreciate that. I appreciate the question. I would say, So, let me just run through some numbers just to give a little more detail, and then I'll give some more color. So for QVC's best customers, keep in mind these are customers that purchase over 20 items a year. Yeah, they're about 17% of the count and 76% of sales. And we felt good through the quarter about their spend retention and their frequency.

Carl: So let me just run through some numbers just to give a little more detail on them.

David Rawlinson: I will give some more color.

David Rawlinson: So for QVC best customers keep in mind. These are customers that purchased over 20 items a year.

David Rawlinson:

David Rawlinson: Yes, they are about 17% of the count of 76.

David Rawlinson: Percent of sales.

David Rawlinson: And we felt good through the quarter about their spend retention.

David Rawlinson: And their frequency and average spend for the quarter for those best customers was up about seven.

David Rawlinson: And average spend for the quarter for those best customers was up about 7% on a trailing 12-month basis, and about 3% on a quarterly year-over-year basis. So our best customers are still performing very well. Going back to the total overall performance of existing customers, and existing customers are a broader subsection, so they're about 50% of the count and 90% of the sales. They purchased on average 32 items. They spent $1,000, or a little over $1,600 in the quarter. That's up 10%, so that feels very good.

David Rawlinson: Percent on a trailing 12 month basis about 3% on a quarterly year over year basis. So our best Quebec customers are still performing very well.

David Rawlinson: Going back to the total overall performance of existing customers and existing customers are.

David Rawlinson: Broader subsection. So there are about 50% of the count 90% of the sales. They purchased on average 32 items. They spent thousands about little over $600.

David Rawlinson II: They spent 1,000, about a little over $1,600 in the quarter. That's up 10%. So that feels very good. The other thing that we feel very good about in the existing customers is their retention was up both at QVC and at HSN versus last year. So we see very encouraging retention. We see good spending behavior. I think we see more stability in the file than we've had historically. I think if you look at the aggregate customer count numbers, you see it's basically flat since Q4. So I think the customer count is very stable now with some good underlying dynamics. The new customers largely look like our traditional new customers. They're coming in through digital channels a little more than they have historically. And it's still early. We're a couple of quarters into really attracting new customers at scale again.

David Rawlinson: In the quarter, that's up 10% so that feels very good the other thing that we feel very good about and the existing.

David Rawlinson: The other thing that we feel very good about our existing customers is that their retention was up both at QVC and at HSN versus last year. So we see good, very encouraging retention. We see good spending behavior. I think we see more stability in the file than we've had historically.

David Rawlinson: Customers as their retention.

David Rawlinson: Was up both at QVC and HSN versus last year. So we see good very encouraging retention that we see good spending behavior.

David Rawlinson: We see more stability and the file than we've had historically I think if you look at the aggregate customer count numbers you see it's basically flat since the fourth quarter. So I think the.

David Rawlinson: I think if you look at the aggregate customer count numbers, you see it's basically flat since the fourth quarter. So I think the customer count is very stable now with some good underlying dynamics. The new customers... largely look like our traditional new customers. They're coming in through digital channels a little more than they have historically. And it's still early. We're a couple of quarters into really attracting new customers at scale again.

David Rawlinson: Customer count is.

David Rawlinson: Very stable now with some good underlying dynamics the new customers.

David Rawlinson: Heart largely look like.

David Rawlinson: Our traditional new customers.

David Rawlinson: They are coming in through digital channels, a little more than they have historically.

David Rawlinson: And it's still early.

David Rawlinson: We're a couple of quarters and to really attracting new new customers at scale again.

David Rawlinson: And it sometimes takes a little bit of time to fully understand what their purchasing patterns are going to be and what the demographics of those new customers are. So we're watching it very closely. But I would say so far we are encouraged by what we're seeing from a pretty substantial crop of new customers that are now coming into the business. OK.

David Rawlinson II: It sometimes takes a little bit of time to fully understand what their purchasing patterns are going to be and what the demographics of those new customers are. So we're watching it very closely. But I would say so far, we are encouraged by what we're seeing from a pretty substantial crop of new customers that are now coming into business.

David Rawlinson: It sometimes takes.

David Rawlinson: A little bit of time to fully understand what their purchasing patterns are going to be and how what the demographics of those new customers are so we're watching it very closely but I would say so far we are encouraged by what we're seeing from a pretty substantial crop of new customers that are now coming into the business.

David Rawlinson: Okay, if I could ask one follow-up question. So there were 100,000 existing QXH customers lost. Would the average spend and purchase frequency on those be more similar to the existing customers, or can you give us any...

David Rawlinson: Okay.

[Operator 2]: Okay. And if I could ask one follow-up. So there were 100,000 existing QxH customers lost. Would the average spend and purchase frequency on those be more similar to the existing, or can you give us any color on that?

Carla Casella: Okay. And if I could ask one follow-up. So there were 100,000 existing QxH customers lost. Would the average spend and purchase frequency on those be more similar to the existing, or can you give us any color on that?

Speaker Change: One follow up so there were 100000 existing keloid today's customers lost with average spend and purchase frequency on those be more similar to the existing or can you give us any color on that.

Speaker Change: I'm sorry ask the question again, yes, we want to make sure losing customers. So in the existing customers' accounts were down by 100000.

David Rawlinson II: I'm sorry. Ask the question again. I just want to make sure.

David Rawlinson: I'm sorry, ask a question again. Yeah, when you're losing customers, so when the existing customers' accounts were down by $100,000, and the LTM versus last year, when you're losing customers, do they have similar spending frequency and patterns as the existing ones, or is it a lower amount, assuming they kind of drift?

[Operator 2]: Yeah. We're losing customers. So in the existing customers, the counts were down by 100,000 in the LTM versus last year. Is there, when you're losing customers, do they have similar spending frequency and patterns as existing, or is it a lower amount, assuming they kind of drift off?

Carla Casella: Yeah. We're losing customers. So in the existing customers, the counts were down by 100,000 in the LTM versus last year. Is there, when you're losing customers, do they have similar spending frequency and patterns as existing, or is it a lower amount, assuming they kind of drift off?

David Rawlinson: LTM versus last year or was there is there when you're losing customers do they have similar spending pick the same patterns as existing or.

David Rawlinson: Is it a lower amount assuming they'd kind of drift off.

David Rawlinson: Yeah, I think that's right. We tend to lose lower-quality customers over time, and so they tend to drop out of the file. We have a pretty big effort going on right now.

David Rawlinson II: Yeah. I think that's right. So we tend to lose lower-quality customers over time, and so they tend to drop out of the file. We have a pretty big effort going on right now. You'll continue to see improvement in the reactivated customers. We're putting a lot of effort into, whenever we lose an existing customer, especially if they were a very good customer, contacting them by phone, or sending them print materials, or giving them coupons to get them back into the brand. I would say, on average, if you trace a customer, one or two things happen. And we know from calling and talking to them, either they have a big life change, often a financial condition in their personal life that causes them to drop off, or they've dropped off slowly and, for whatever reason, have become less connected to the brand.

Speaker Change: Yes, I think thats right. So we tend we tend to lose lower quality customers over time.

David Rawlinson: And so they tend to do.

David Rawlinson: Drop out of.

David Rawlinson: Drop out of the file we have a pretty big effort going on right now you'll continue to see improvement in the reactivated customers, we're putting a lot of effort into whenever we lose an existing customer, especially if they were very good customer contacting them by phone or sending them print materials are giving them.

David Rawlinson: You'll continue to see improvement in the reactivated customers. We're putting a lot of effort into whenever we lose an existing customer, especially if they were a very good customer, contacting them by phone or sending them print materials or giving them coupons to get them back into the brand. I would say, on average, if you trace a customer, one or two things happen. And we know from calling and talking to them that either they have a big life change, often a financial condition in their personal life that causes them to drop off.

David Rawlinson: Coupons to get them back into the brand I would say if you on average a few trades the customer one or two things happened there.

David Rawlinson: And we know from calling and talk to them talking to them.

David Rawlinson: They have a big life change often a financial condition in their personal lives that causes them to drop off.

David Rawlinson: Or they've dropped off slowly and, for whatever reason, have become less connected to the brand. Sometimes that's the result of technology. I would say, final observation, we're seeing about as many people move up the file as move down the file. So, our upward migration is now about the same as our downward migration. And that's been a reversal, a positive reversal, and I think that'll continue. And then, eventually, when that lifts is when you'll actually start to see growth in the aggregated customer file. Okay, great.

David Rawlinson: Are they dropped off slowly for whatever reason have become less connected to the brand sometimes that is a result of <unk>.

David Rawlinson II: Sometimes that's a result of technology. I would say, final observation, we're seeing about as many people move up the file as move down the file. So our upward migration is now about the same as our downward migration. And that's been a reversal, a positive reversal. And I think that'll continue. And then eventually, when that flips is when you'll actually start to see growth in the aggregated customer file.

David Rawlinson: Technology.

Speaker Change: I would say final observation.

David Rawlinson: Being about as many people move up the file as move down to file so our upward migration.

David Rawlinson: Now about the same as our downward migration and Thats been a reversal of positive reversal and I think that will continue and then eventually when that flips is when you'll actually start to see growth in the aggregator customer file.

Speaker Change: Okay great.

[Operator 2]: Okay. Great. Thanks. I've got more, but I'll get back in queue and let others ask.

Carla Casella: Okay. Great. Thanks. I've got more, but I'll get back in queue and let others ask.

David Rawlinson: Thanks.

David Rawlinson: I've got more, but I'll get back in the queue and let others ask.

Speaker Change: I've got more but I'll get back in queue, and let others ask.

David Rawlinson II: All right. Thank you.

Speaker Change: Alright, thank you.

David Rawlinson: Our next question is from the line of William Reuter with Bank of America. Please proceed with your question.

Operator: Our next question is from the line of William Reuter with Banks of America. I'm pleased to see you with your questions.

Bill Wafford: Our next question is from the line of William Reuter with Bank of America. Please proceed with your question.

Operator: Our next question is from the line of William Reuter with Bank of America. Please proceed with your question.

William Reuter: Good morning. I think that streaming comprised 5% of your minutes viewed last year. You mentioned it was growing. I guess, can you share where you expect that streaming may be as a percentage of minutes viewed this year? And then, how is the spending of the customers that are viewing minutes on streaming services versus traditional linear TV?

William Reuter: Good morning.

David Rawlinson II: Good morning. I think that streaming comprised 5% of your minutes viewed last year. You mentioned it was growing. I guess, can you share where you expect that streaming may be as a percentage of minutes viewed this year? And then how is the spending of the customers that are viewing minutes on streaming services versus traditional linear TV?

William Reuter: Good morning. I think that streaming comprised 5% of your minutes viewed last year. You mentioned it was growing. I guess, can you share where you expect that streaming may be as a percentage of minutes viewed this year? And then how is the spending of the customers that are viewing minutes on streaming services versus traditional linear TV?

William Reuter: I think that streaming comprised 5% of your minutes viewed last year.

William Reuter: You mentioned it was growing.

William Reuter: I guess can you share where you expect that streaming may be as a percentage of minutes viewed this year and then how is the spending of the customers that are viewing minutes on streaming services versus traditional linear TV.

Speaker Change: Yes. Thank you for the question I don't I don't think we on a regular basis updated exactly the percentage of overall minutes that streaming is what I would say as.

David Rawlinson II: Yeah. Thank you for the question. I don't think we've, on a regular basis, updated exactly the percentage of overall minutes that streaming is. What I would say is it was about 5% last year. It's more than that. It's more than that now. It's been growing, where streaming as a total percentage of minutes is sort of high single digits and growing fast now. So we're very happy with that progress. I think they'll continue to take share of total minutes as they continue to grow relatively quickly. The spending dynamics are a little bit difficult to tease out because, a lot of times, our customers are multi-platform customers. So somebody who's streaming us may also be watching us on linear, and then they're shopping across a variety of sites. And so we tend to look at them as multi-platform customers, not streaming-only customers.

David Rawlinson: Thank you for the question. I don't think we've, on a regular basis, updated exactly the percentage of overall minutes that streaming is. What I would say is it was about 5% last year. It's more than that. It's more than that now.

David Rawlinson: It was about 5% last year, it's more than that.

David Rawlinson: It's been growing. Streaming as a total percentage of minutes is sort of in the high single digits and growing fast now. So, we're very happy with that progress.

David Rawlinson: It's more than that now it's been growing where streaming as a total percentage of minutes is sort of high single digits and growing fast in ounce of wear.

David Rawlinson: We're very happy with that progress I think they'll continue to take share of total minutes as they continue to grow.

David Rawlinson: I think they'll continue to take share of total minutes as they continue to grow relatively quickly. The spending dynamics are a little bit difficult to tease out because a lot of times our customers are multi-platform customers. So, somebody who's streaming us may also be watching us on linear, and then they're shopping on across a variety of sites. And so, we tend to look at them as multi-platform customers, not just streaming only customers.

David Rawlinson: Relatively quickly.

David Rawlinson: The spending dynamics are a little bit difficult to tease out because a lot of times our customers on multi platform customers. So somebody who's streaming us may also be watching us on linear and then they're shopping on.

David Rawlinson: Across a variety of sites and so we tend to look at them as multi platform customers not streaming only customers I would say, there's nothing about the profile of our streaming customers that.

David Rawlinson: I would say there's nothing about the profile of our streaming customers that causes us to be less excited about what we think the growth of streaming is going to mean for the business in the medium and the long term.

David Rawlinson II: I would say there's nothing about the profile of our streaming customers that causes us to be less excited about what we think the growth of streaming is going to mean for the business in the medium and the long term.

David Rawlinson: Causes us to be less excited about where we think what we think the growth of streaming is going to meet.

David Rawlinson: <unk> for the business in the medium to long term.

David Rawlinson II: Got it. And then just secondarily for me, there have not been kind of consistent updates on Project Athens. I didn't know whether there was any way to think about what's left on this program. I'm not sure if the large majority of it has been completed or what types of dollar opportunities still may remain.

William Reuter: Got it. And then just secondarily for me, there have not been kind of consistent updates on Project Athens. I didn't know whether there was any way to think about what's left on this program. I'm not sure if the large majority of it has been completed or what types of dollar opportunities still may remain.

Speaker Change: Got it.

David Rawlinson: And then, just secondarily for me, you know, there have not been any consistent updates on Project Athens. I didn't know whether there was any way to think about what's left in this program. I'm not sure if the large majority of it has been completed or what types of dollar opportunities still may remain.

David Rawlinson: And then just secondarily for me.

David Rawlinson: There have not been kind of consistent updates on project Athens.

David Rawlinson: I didn't know whether there was any way to think about what's left on this program I'm not sure. If there's a large majority of it has been completed or what types of dollar opportunities still may remain.

Speaker Change: Yeah, I think when you look through kind of what's been done in project essence, we've talked a lot about you know initial.

David Rawlinson: Yeah, I think when you look through kind of what's been done in Project Athens, you know, we've talked a lot about, you know, initiatives impacting, you know, kind of product margin fulfillment, you know, kind of working down the P&L there. I think when you look at, you know, the balance of the year and what it'll carry into 2025, you know, I think some of those initiatives are still being delivered, whether it's associated with cost of goods sold improvement, fulfillment initiatives, and others that'll continue to benefit gross margin throughout the year.

Ben Oren: Yeah. I think when you look through kind of what's been done in Project Athens, we've talked a lot about initiatives impacting kind of product margin fulfillment, kind of working down the P&L there. I think when you look at the balance of the year and what'll carry into 2025, I think some of those initiatives are still being delivered, whether it's associated with cost of goods sold improvement, fulfillment initiatives, and others that'll continue to benefit gross margin throughout the year. In addition, David referenced other in terms of how we're reaching out to the customer and some growth initiatives that I think will start to take shape, and you'll start to see more impactful into 2024 heading into 2025.

Bill Wafford: Yeah. I think when you look through kind of what's been done in Project Athens, we've talked a lot about initiatives impacting kind of product margin fulfillment, kind of working down the P&L there. I think when you look at the balance of the year and what'll carry into 2025, I think some of those initiatives are still being delivered, whether it's associated with cost of goods sold improvement, fulfillment initiatives, and others that'll continue to benefit gross margin throughout the year. In addition, David referenced other in terms of how we're reaching out to the customer and some growth initiatives that I think will start to take shape, and you'll start to see more impactful into 2024 heading into 2025.

David Rawlinson: Initiatives impacting you know kind of product margin fulfillment kind of working down the P&L. There I think when you look at the balance of the year and what will carry into 25 I think.

David Rawlinson: Some of those initiatives are still being delivered whether it's associated with cost of goods sold improvement fulfillment initiatives and others that will continue to benefit gross margin throughout the year. In addition, you know David referenced other in terms of how we're reaching out to the customer in some growth initiatives that I think will start to take take shape and you'll start to see more impactful.

David Rawlinson: In addition, you know, David referenced other initiatives in terms of how we're reaching out to the customer and some growth initiatives that I think will start to take shape and you'll start to see more impactful into 2024 heading into 2025.

David Rawlinson: Will enter 'twenty four heading into 'twenty five.

David Rawlinson: Got it. And then, I guess just lastly for me, in terms of freight costs, do you know kind of roughly what percentage of freight is that which you pay for versus your vendors paying for the freight? And then if you're expecting any changes in your freight costs kind of going forward versus the LTM period?

David Rawlinson: Got it and then I guess, just lastly from me in terms of.

David Rawlinson II: Got it. And then, I guess, just lastly for me, in terms of freight costs, do you know kind of roughly what percentage of freight are those which you pay for versus your vendors paying for the freight? And then, if you're expecting any changes in your freight costs kind of going forward versus the LTM period.

William Reuter: Got it. And then, I guess, just lastly for me, in terms of freight costs, do you know kind of roughly what percentage of freight are those which you pay for versus your vendors paying for the freight? And then, if you're expecting any changes in your freight costs kind of going forward versus the LTM period.

David Rawlinson: Freight costs.

David Rawlinson: Do you know kind of roughly what percentage of freight.

David Rawlinson: Are those which you pay for versus your vendors.

David Rawlinson: Paying for the freight and then if youre expecting any changes in your freight costs kind of.

David Rawlinson: Going forward versus the LTM period.

David Rawlinson: Yeah, I mean, it's obviously a mix, right, depending on, you know, kind of how an individual contract is struck with our, you know, various suppliers. But we haven't seen material impacts. Our teams have done a really good job of kind of managing through, obviously, you had, you know, kind of a lot of volatility around the COVID time periods. I think now even managing with the Red Sea, you know, Port of Baltimore, which we don't use, I think they've been able to effectively manage that and kind of mitigate any, you know, increases in freight and probably have a little bit of opportunity as more supply has come Got it. That's all for me.

Ben Oren: Yeah. I mean, it's obviously a mix, right, depending on kind of how an individual contract is struck with our various suppliers. We haven't seen material impacts. Our teams have done a really good job of kind of managing through, obviously, you had kind of a lot of volatility around the COVID time periods. I think now, even managing with the Red Sea, Port of Baltimore, which we don't use, I think they've been able to effectively manage that and kind of mitigate any increases in freight and probably have a little bit of opportunity as more supplying has come online. But that's always kind of a case-by-case basis. We don't expect anything hugely material to change, though.

Bill Wafford: Yeah. I mean, it's obviously a mix, right, depending on kind of how an individual contract is struck with our various suppliers. We haven't seen material impacts. Our teams have done a really good job of kind of managing through, obviously, you had kind of a lot of volatility around the COVID time periods. I think now, even managing with the Red Sea, Port of Baltimore, which we don't use, I think they've been able to effectively manage that and kind of mitigate any increases in freight and probably have a little bit of opportunity as more supplying has come online. But that's always kind of a case-by-case basis. We don't expect anything hugely material to change, though.

Speaker Change: Yes, I mean, it's obviously a mix right depending on you know kind of how an individual contract has struck with our various suppliers. We haven't seen material impacts our teams have done a really good job of kind of managing through obviously kind.

David Rawlinson: A lot of volatility around the Covid time periods anything now even managing with the Red Sea Port of Baltimore, which we don't choose things they've been able to effectively manage that and kind of mitigate any.

David Rawlinson: Increases in freight.

David Rawlinson: And probably have a little bit of opportunity as more supply has come online, but that's always a kind of a case by case basis, we don't expect anything hugely material to change though.

William Reuter: Got it. That's all for me. Thank you.

David Rawlinson II: Got it. That's all for me. Thank you.

William Reuter: Got it. That's all for me. Thank you.

Speaker Change: Got it that's all for me thank you.

Ben Oren: Sure.

Bill Wafford: Sure.

David Rawlinson II: Thank you.

Speaker Change: Thank you.

William Reuter: Our next question is from the line of Hale Holden with Barclays. Please proceed with your questions Hey, good morning.

Operator: Our next question is from the line of Hale Holden with Barclays. Please proceed with your questions.

Bill Wafford: Our next question is from the line of Hal Holden with Barclays. Please proceed with your questions.

Operator: Our next question is from the line of Hale Holden with Barclays. Please proceed with your questions.

Hale Holden: Good morning. The sales that were lost because of weather, whether they were swim or outdoor, is your expectation that they may come back in the second quarter, or are they just lost permanently? And then, any thoughts on consumer health as you go into the second quarter versus what you saw in the first quarter? And then I had a follow-up.

Hale Holden: Good morning. The sales that were lost because of weather, whether they were in swim or outdoor, is your expectation that they may come back in Q2, or are they just lost permanently? And then any thought on consumer health as you go into Q2 versus what you saw in Q1? And then I had a follow-up.

Hale Holden: The <unk>.

Hale Holden: Sales that were lost because of weather whether they were in swim are outdoor.

Hale Holden: Your expectation that they may come back in the second quarter or are they <unk>.

Hale Holden: Loss.

Hale Holden: Permanently and then any thought on consumer health health.

Hale Holden: As you go into the second quarter versus what you saw in the first quarter and then I have a follow up.

David Rawlinson: Yeah, two good and fair questions, um.., think we're seeing, and I would say this has been true over the last 12 to 18 months, is consumers are buying closer to the event and they're buying later, the last three or four seasonal cycles have started later than they have historically and so I think we're seeing some of that in spring as well so I would certainly hope that a lot of the uptick from spring and from seasonal wear will continue to climb as we get as the weather turns warmer and we've seen a little bit of that already so I I do think those sales continue to be available for I do think those sales continue to be available for us in terms of consumer in terms of consumer sentiment in the macro I'd say it continues to be relatively stable but stable at sort of persistently lower level and discretionary retail than what we've seen I think You will have seen the GDP, real consumer spending numbers, unemployment numbers. I think there's nothing about those numbers that tells you the top is going to be taken off the market any time soon. That being said, we're continuing to see real stability in terms of trends, in terms of buying behavior, purchase frequency, so our customers are sticking with us. They're still very engaged.

David Rawlinson II: Yeah. Two good and fair questions. What we think we're seeing, and I would say this has been true over the last 12 to 18 months, is consumers are buying closer to the event, and they're buying later. I would say the last 3 or 4 seasonal cycles have started later than they have historically. And so I think we're seeing some of that in spring as well. So I would certainly hope that a lot of the uptick from spring and from seasonal wear will continue to climb as the weather turns warmer. And we've seen a little bit of that already. So I do think those sales continue to be available for us.

Hale Holden: Yes.

Speaker Change: Two good and fair questions.

David Rawlinson: <unk>.

David Rawlinson: What we.

David Rawlinson: I think we are seeing and I would say this has been true over the last 12 to 18 months as consumers are buying closer to the event and they are buying later I would say the last three or four.

David Rawlinson: Seasonal cycles have started later than they have historically.

David Rawlinson: And so I think we're seeing some of that in the spring as well so I would say.

David Rawlinson: Certainly hope.

David Rawlinson: A lot of.

David Rawlinson: Uptick from spring and from seasonal where we will continue to climb as we get.

David Rawlinson: As the weather turns warmer and we've seen a little bit of that already.

David Rawlinson: I do think those sales continue to be.

David Rawlinson: <unk> four.

David Rawlinson: I do think those sales continue to be available for us in terms of the consumer in terms of consumer sentiment.

David Rawlinson II: In terms of consumer sentiment in the macro, I'd say it continues to be relatively stable, but stable at a sort of persistently lower level in discretionary retail than what we've seen. I think you will have seen the GDP, real consumer spending numbers, unemployment numbers. I think there's nothing about those numbers that tells you the top's going to be taking off the market anytime soon. That being said, we're continuing to see real stability in terms of trends, in terms of buying behavior, purchase frequency. So our customers are sticking with us. They're still very engaged. They're still watching, and they're still continuing to shop. We do see a little bit of trading down. So we see a little bit of preference for lower price points. We see a little bit of preference for waiting for sales. That's especially the case by brands.

David Rawlinson: And the macro.

David Rawlinson: Say it continues to be relatively.

David Rawlinson: <unk>.

David Rawlinson: Stable.

David Rawlinson: But stable at sort of persistently lower level and discretionary retail than what we've seen I think.

David Rawlinson: You will have seen the GDP real consumer spending numbers unemployment numbers I think there is nothing about those numbers that tells you. The task is going to be taken off the market.

David Rawlinson: Anytime soon that being said, we're continuing to see real stability in terms of trends in terms of.

David Rawlinson: Buying behavior or purchase frequency.

David Rawlinson: Sure.

David Rawlinson: So our customers are sticking with us they are still very engaged they are still watching and they are still <unk>.

David Rawlinson: They're still watching, and they're still continuing to shop. We do see a little bit of trading down, so we see a little bit of preference for lower price points. We see a little bit of preference for waiting for sales. That's especially the case for brands; some of our lower average sale price bands tend to be experiencing that more. We also see a little bit of leaning away from especially large purchases where consumers look to be a bit more considered, but generally, I would say we're seeing decent stability in the macro and in the outlook.

David Rawlinson: <unk> to shop, we do see a little bit of trading down so we see a little bit of preference for lower price points, we see a little bit of <unk>.

David Rawlinson: Preference for.

David Rawlinson: Waiting for sales.

David Rawlinson: Especially the case by <unk>.

David Rawlinson: Brands some of our lower average sell price bands tend to be experiencing that.

David Rawlinson II: Some of our lower average sale price bands tend to be experiencing that more. And we also see a little bit of leaning away from especially large purchases where consumers look to be a bit more considered. But generally, I would say we're seeing decent stability in the macro and in the outlook.

David Rawlinson: And we also see a little bit of leaning away from especially large purchases where consumers look to be a bit more considered.

David Rawlinson: But generally I would say we're seeing.

David Rawlinson: Decent stability in the macro and then the outlook.

Hale Holden: Thanks. And then the second question I had was if you could walk through the decision to put the 24 maturity mostly on the revolver rather than using the cash that you had on the balance sheet, just given the interest cost on the revolver.

Hale Holden: Thanks. And then the second question I had was if you could walk through the decision to put the 2024 maturity mostly on the revolver rather than using the cash that you had on the balance sheet, just given the interest cost on the revolver.

Speaker Change: And then the second question I had was.

David Rawlinson: If you could walk through the decision to put the 24 maturity, mostly on a revolver rather than using the cash that you had on the balance sheet.

Hale Holden: Just given the interest cost on the revolver.

Hale Holden: Yes.

David Rawlinson: Yeah, I mean, really just timing there, you know, in the quarter. We'll work through that on the balance of the year on appropriate, you know, kind of capital allocation there, but timing in the quarter.

Ben Oren: Yeah. I mean, really just timing there in the quarter. We'll work through that on the balance of the year, on appropriate kind of capital allocation there. But timing in the quarter is all.

Bill Wafford: Yeah. I mean, really just timing there in the quarter. We'll work through that on the balance of the year, on appropriate kind of capital allocation there. But timing in the quarter is all.

Speaker Change: Really just timing there.

David Rawlinson: In the quarter or do that on the balance of the year on appropriate kind of capital allocation there.

David Rawlinson: Timing in the quarter.

Hale Holden: Thank you very much. I appreciate it.

Speaker Change: Okay. Thank you very much I appreciate it.

Hale Holden: Okay. Thank you very much. Appreciate it.

Hale Holden: Our next question is from the line of Guru Martinsen with Jefferies. Please proceed with your questions.

Operator: Our next question is from the line of Guru Martinson with Jeffreys. Please just use your questions.

Bill Wafford: Our next question's from the line of Guru Martinson with Jefferies. Please proceed with your questions.

Operator: Our next question's from the line of Karru Martinson with Jefferies. Please proceed with your questions.

Guru Martinson: Good morning speaking as someone who was targeted with the new T V. C. Women over 50 at this morning, I can certainly see say that you guys have stepped up your advertising nice to see.

Karru Martinson: Good morning. Speaking as someone who was targeted with the new QVC Women Over 50 ad this morning, I can certainly say that you guys have stepped up your advertising. Nice to see. I think last year, you had kind of the inflection point in the Q3 where the business changed. One of the pushbacks I've gotten this morning is like, "Hey, you guys have shown stability. You have traction, but these are against easy comps." Do you feel that the momentum that you've generated will continue here through the second half of the year?

Guru Martinson: I think last year, you had kind of the inflection point in the third quarter.

Guru Martinson: Where the business changed.

Guru Martinson: One of the pushback that I've gotten this morning is like Hey, you guys have shown stability you have traction, but these are against easy comps do you feel that the momentum that you've generated will continue here through the second half of the year.

Operator: Okay.

Guru Martinson: So first, I'm glad you saw some of our advertisement. I would say don't just look around, feel free to log in.

David Rawlinson II: So first, I'm glad you saw some of our advertisement. I would say, "Don't just look by. Feel free to log in and help out the financials. We want you as a customer as well." So we did have, I think, just on a practical basis, we did have some easier comps in the first half of the year. I think that's fair. And obviously, we had better performance in the back half of the year from an OIBDA and free cash flow basis last year. I think we have the ability to continue making real progress as we go through the back half. Bill talked about the fact that we continue to have Athens initiatives that we're executing going through the year. We continue to build on those initiatives. We have a management cadence where we're adding additional incremental initiatives to Project Athens as we go.

Guru Martinson: So first I'm glad you saw some of our advertisement I would say don't just look by feel free to log.

Guru Martinson: How about the financials, we want to you as a customer as well. So we did have I think just on the practical basis, we did have some easier comps in the first and the first half.

Guru Martinson: The year I think Thats I think Thats fair.

Guru Martinson: Obviously, we had better performance in the back half of the year from an employee but on free cash flow basis last year. I think we think we have the ability to continue.

Guru Martinson: We're making real progress as we go through the back half Bill talked about the fact that we continue to have Athens initiatives that we're executing going through the year. We continue to build on those initiatives we have.

Guru Martinson: Management cadence, where we're adding.

Guru Martinson: Additional incremental initiatives to project Athens, as we go so we're re.

David Rawlinson II: So we're refilling the funnel of initiatives. And then I think the other thing that will continue to be positive is as the customer count stabilizes and as we continue to get closer to flat and then growth, that also gives us some additional ability to drive the bottom-line results. So we continue to be optimistic about hitting our objectives for the full year.

Guru Martinson: Re feeling the funnel of.

Guru Martinson: Of initiatives and then I think the other thing that will continue to be.

Guru Martinson: The positive is that the customer count stabilizes and as we continue to get closer to flat and then growth that also gives us.

Guru Martinson: Some additional <unk>.

Guru Martinson: Our ability to drive the bottom line results. So we can continue to be optimistic about hitting our objectives for the full year.

Guru Martinson: Okay.

Guru Martinson: Okay, and how do you guys feel right now about your inventory given kind of perhaps some timing shifts and seasonality and as people buy closer to need?

Karru Martinson: Okay. And how do you guys feel right now on your inventory given kind of perhaps some timing shifts and seasonal, as people buy closer to need?

Guru Martinson: You guys feel right now on your inventory given kind of perhaps some timing shifts in seasonal.

Guru Martinson: As people.

Guru Martinson: Buy closer to need.

Guru Martinson: Yes, I think we feel really good about you know a lot of work was done over the last I'll say 18 months to get our inventory kind of at or right size position. I think if you look at Q ending Q1 24 versus in Q1 'twenty three the inventory level was still down about $200 million and you feel comfortable that from a days days of supply perspective.

Bill Wofford: Yeah, I think we feel really good about, you know, a lot of work has been done over the last, let's say, 18 months to get our inventory, you know, kind of at the right size position. I think if you look at, you know, ending Q124 versus ending Q123, the inventory level was still down about $200 million. You feel comfortable that from a, you know, days of supply perspective, it seems we've got really good control on, you know, kind of managing the inventory level, even with the kind of impact of people buying a little closer.

Ben Oren: Yeah. I think we feel really good about a lot of work was done over the last, I'll say, 18 months to get our inventory kind of to a right-sized position. I think if you look at ending Q1 2024 versus ending Q1 2023, the inventory level was still down about $200 million. And you feel comfortable that from a days of supply perspective, the teams have got a really good control on kind of managing inventory level and even with the kind of the impact of people buying a little closer to need.

Bill Wafford: Yeah. I think we feel really good about a lot of work was done over the last, I'll say, 18 months to get our inventory kind of to a right-sized position. I think if you look at ending Q1 2024 versus ending Q1 2023, the inventory level was still down about $200 million. And you feel comfortable that from a days of supply perspective, the teams have got a really good control on kind of managing inventory level and even with the kind of the impact of people buying a little closer to need.

Bill Wofford: The teams have got a really good.

Bill Wofford: Control on kind of managing inventory level.

Bill Wofford: Even with the kind of.

Bill Wofford: The impact of people buying a little closer to need.

David Rawlinson II: Yeah. I'd say a couple of things. I agree with Bill. OIBDA is in a good place. Age of inventory is in a good place. I think aggregate level of inventory we're carrying is in a good place. What I feel really good about is we talked about percentage of our sales that were going to new or first-time on-air items, that's continued to grow. And those items are performing better than repeat items. And so as we've been able to get to a better inventory position and bring in new, higher-quality merchandise than we had last year, we think that continues to be a tailwind for the business. So we feel good about our inventory and about what's in it and about what we're going to be bringing in for the back half of the year.

Speaker Change: Yes, I would say a couple of things I agree with bill.

David Rawlinson: Yeah. I'd say a couple of things.

David Rawlinson: Obsolescence.

David Rawlinson: I agree with Bill. Obsolescence is in a good place. The age of inventory is in a good place. I think the aggregate level of inventory we're carrying is in a good place. What I feel really good about, as we talked about, the percentage of our sales that were going to new or first-time on-air items, that continued to grow, and those items are performing better than repeat items. And so, as we've been able to get to a better inventory position and bring in new, higher-quality merchandise than we had last year, we think that continues to be a tailwind for the business. So, we feel good about our inventory and about what's in it and about what we're going to be bringing in for that half of the year.

David Rawlinson: In a good place.

David Rawlinson: The age of inventory is in a good place I think aggregate level of inventory, we're carrying us in a good place what I feel really good about is we talked about percentage of our sales that were going to new or first time.

David Rawlinson: Our items that continue to grow in those items are performing.

David Rawlinson: Better than repeat items, and so as we've been able to get to a better inventory position and bring in new higher quality.

David Rawlinson: Merchandise than we had last year, we think that continues to be a.

David Rawlinson: A tailwind.

David Rawlinson: For the business. So we feel we feel good about our inventory and about whats in it and about what we're going to be bringing in for the back half of the year.

Guru Martinson: Okay, just lastly, there's been a kind of shift in the questions I get, you know, people feel comfortable that you have the liquidity, the cash flow to handle the 24 maturities that you retired, the 25 is coming up. I think the big sticking point for the market has been the 26 revolver. You know, how are you guys thinking about that? Do you need a revolver this size, and what's kind of the early feedback from your banks?

Speaker Change: Okay, and just lastly, then.

Karru Martinson: Okay. Just lastly, there's been a kind of a shift in the questions I get. People feel comfortable that you have the liquidity, the cash flow to handle the 2024 maturities that you retired, the 2025 is coming up. I think the big sticking point for the market has been the 2026 revolver. How are you guys thinking about that? Do you need a revolver this size? And what's kind of the early feedback from your banks?

Guru Martinson: A shift in the questions I get people feel comfortable that you have the liquidity to cash flow to handle the 'twenty four maturities that you retired the 25 is coming up I think the big sticking point for the market has been the 26 revolver.

Guru Martinson: Are you guys thinking about that do you need a revolver this size and what's kind of the early feedback from from your banks.

Ben Oren: This is Ben Oren. I think the first comment would be, "We don't need a revolver of this size." We've definitely gone that high, and so we've got room to reduce that to make banks more comfortable. We're looking at it. It's gotten more and more favorable as this has continued to perform, and I would say that you know we're only about a half turn away from being under the three and a half times our test under the bond indenture.

David Rawlinson II: Yeah. This is Ben Oren. I think the first comment would be we don't need a revolver of this size. We've never really gone that high. And so we've got room to reduce that to make banks more comfortable. We're looking at it. It's gotten more and more favorable as the business has continued to perform. And I would say that we're only about a half turn away from being under the 3.5x RFP test under the bond indenture. So long as the business continues on this trajectory, we're going to continue to monitor it and try to refinance in a more favorable environment. Whether that comes in the form of a cash flow revolver or an AVL or some alternative, we'll basically roll with what the market conditions are at that time.

Ben Oren: Yeah. This is Ben Oren. I think the first comment would be we don't need a revolver of this size. We've never really gone that high. And so we've got room to reduce that to make banks more comfortable. We're looking at it. It's gotten more and more favorable as the business has continued to perform. And I would say that we're only about a half turn away from being under the 3.5x RFP test under the bond indenture. So long as the business continues on this trajectory, we're going to continue to monitor it and try to refinance in a more favorable environment. Whether that comes in the form of a cash flow revolver or an AVL or some alternative, we'll basically roll with what the market conditions are at that time.

Ben: This is Ben.

Ben Oren: I think the first comment would be we don't need a revolver of this size, we've definitely gotten that high and so we've got room to reduce that to make banks more comfortable.

Ben Oren: We're looking at it.

Ben Oren: It's gotten more and more favorable and this has continued to perform.

Ben Oren: And I would say that.

Ben Oren: We're only about a half turn away.

Ben Oren: Being under the two five times test under the bond indenture.

Ben Oren: So, so long as the business continues on this trajectory, you know we're going to continue to monitor it and try to finance in a more favorable environment. Whether that comes in the form of a cash flow revolver or an AVL or some other alternative, you know we'll basically roll with what the market conditions are at that time.

Ben Oren: So so long as the business continues on this trajectory.

Ben Oren: We're going to continue to monitor it.

Ben Oren: To finance and a more favorable environment.

Ben Oren: Whether that comes in the form of a cash flow revolver or an ABL or some alternative.

Ben Oren: Well basically wrong with what the market conditions are at that time.

Guru Martinson: Thank you very much, guys; I appreciate it.

Speaker Change: Thank you very much guys I appreciate it.

Karru Martinson: Thank you very much, guys. Appreciate it.

Guru Martinson: Thank you. Our next question is who follow up from the line of Carla Casella with Jpmorgan. Please proceed with your question.

Operator: Thank you. Our next question is a follow-up from the line of Carla Cotello with J.P. Morgan. I am pleased to see you with your question.

Bill Wafford: Thank you. Our next question's a follow-up from the line of Carla Casella with JP Morgan. Please proceed with your question.

Operator: Thank you. Our next question's a follow-up from the line of Carla Casella with JP Morgan. Please proceed with your question.

Carla Casella: Great, thank you. Following on that debt question, can you give us the net deferred tax viability as it relates to the LINTA notes at the end of the quarter?

Carla Cotello: Great. Thank you.

Carla Casella: Great. Thank you. Following on that debt question, can you give us the net deferred tax liability as it relates to the LINTA Notes at the end of the quarter?

Carla Cotello: Following on that question.

Carla Cotello: Can you give us the.

Carla Cotello: Net deferred tax liability as it relates to the LINTA notes at the end of the quarter.

Bill Wofford: Hey Carla, I think we're going to be consistent and only get that once annually at Investor Day, but no material change.

Carla Casella: Hey, Karla I think we're going to be.

David Rawlinson II: Hey, Carla. I think we're going to be consistent and only give that once annually at the investor day, but no material change.

Ben Oren: Hey, Carla. I think we're going to be consistent and only give that once annually at the investor day, but no material change.

Speaker Change: <unk> and only give that once annually at the Investor day, but no material change.

Carla Casella: Okay. And you talked about the 26 revolver. Did you say, I may have missed it, that you expect to pay the 25 notes off in cash like you did the 24 notes?

Carla Casella: Okay. And you talked to the 2026 revolver. Did you say - I may have missed it - that you expect to pay the 2025 notes off cash like you did with cash and revolver like you did the 2024 notes?

Bill Wofford: Hey.

Speaker Change: And you talk.

Carla Casella: 26 revolver did you say I may have missed it did you expect to pay the 25 notes off cash like you did the.

Carla Casella: With cash and revolver like you did the 24 notes.

Bill Wofford: Currently, that is our expectation for cash on hand and revolver for the 2025s, but if the markets continue to improve, we'll continue to look at the capital markets as an option to improve.

Carla Casella: Currently that is our expectation that cash and cash on hand, and revolver for the 2020 fives, but if the markets continue to improve.

David Rawlinson II: Currently, that is our expectation, cash on hand and revolver for the 2025s. But if the markets continue to improve, we'll continue to look at the capital markets as an option to extend.

Ben Oren: Currently, that is our expectation, cash on hand and revolver for the 2025s. But if the markets continue to improve, we'll continue to look at the capital markets as an option to extend.

Bill Wofford: We will continue to look at.

Bill Wofford: Capital markets has an option to extend.

Carla Casella: You talked about seasonality and how customers are buying closer to the season. What's your comfort level with the inventory that you have now? Is it a lot of seasonal merchandise that may need to be cleared, or are you in a good seasonal position with your merchandise inventory?

Carla Casella: Okay. Great. And then you talked about seasonality, and now customers are buying closer to season. What's your comfort level with the inventory that you have now? Is it a lot of seasonal merchandise that may need to be cleared, or are you in a good seasonal position with your merchandise inventory?

Speaker Change: Okay great.

Bill Wofford: Talks about.

Carla Casella: <unk>.

Carla Casella: Some are buying closer to season.

Carla Casella: What's your comfort level with the inventory that you have now is it a lot of seasonal merchandise. It may need to be cleared or are you in a good seasonal position with your merchandise inventory.

David Rawlinson: Yeah, I think we feel good about our inventory. We don't have, we don't see a lot of excess seasonal that would need to be cleared. We feel good about the level of new. We feel good about the assortment going into the spring. So nothing that we see that's concerning there.

Karru Martinson: Yeah. I think we feel good about our inventory. We don't see a lot of excess seasonal that would need to be cleared. We feel good about the level of new. We feel good about the assortment going in the spring. So nothing that we see that's concerning there.

David Rawlinson II: Yeah. I think we feel good about our inventory. We don't see a lot of excess seasonal that would need to be cleared. We feel good about the level of new. We feel good about the assortment going in the spring. So nothing that we see that's concerning there.

Carla Casella: Yes, I think we feel good about our inventory we don't have we don't see.

David Rawlinson: A lot of excess seasonal that would need to be cleared.

David Rawlinson: <unk>.

David Rawlinson: We feel good about the level of new we feel good about the assortment going into spring so.

David Rawlinson: Nothing that we see thats concerning there.

Carla Casella: Okay. And the fire-related proceeds, that's all behind you, right? There are no more, I guess, assets or anything on the balance sheet accrued for potential additional proceeds?

Speaker Change: Okay, and the fire related proceeds.

Carla Casella: All behind you right now are there no more I guess asset Sir.

Carla Casella: Anything on the balance sheet of crude for potential additional proceeds.

David Rawlinson: No, that's all behind us, Carla. Okay, great.

Speaker Change: No. That's yes, that's all behind its Carla Okay, Great and then just one question on.

Ben Oren: Yeah. That's all behind us, Carla.

David Rawlinson II: Yeah. That's all behind us, Carla.

Carla Casella: Okay, great. And there's just one question on Japan. Any more comments you can give us on that market, how the performance is there? And is that something you would ever consider monetizing, that stake in Japan, to address some of your debt maturities?

Carla Casella: Okay. Great. And then just one question on Japan. Any more comments you can give us on that market, how the performance is there? And is that something you would ever consider monetizing, that stake in Japan, to address some of your debt maturities?

Carla Casella: Japan any more comments you can give us on that market how the performance is there.

Carla Casella: And is that something you would ever consider monetizing that stake in Japan to address some of your debt maturity.

Speaker Change: Yes so.

David Rawlinson: Yeah, so on performance, we continue to be optimistic about that business. We continue to think they're taking share in that market. They've largely outrun a slightly, even if anything, more difficult set of market conditions.

David Rawlinson II: Yeah. So on performance, we continue to be optimistic about that business. We continue to think they're taking share in that market. They largely outrun a slightly, if anything, more difficult set of market conditions. And so I'd say that's been, if you look over the last few years, one of our strongest performing and most consistent and strongest performing businesses. And it's a business that is growing and continues to grow. And so we feel very good. One other thing I'd just note about Japan is that it is our core business model. So we do, essentially, with regional adjustments, essentially what we do across the QVC and HSN businesses in all of our other markets. We share talent across. We've had people who have led that business that have gone on to lead other businesses across the portfolio and vice versa.

Carla Casella: On performance, we continue to be optimistic about that business. We continue to think theyre taking share.

David Rawlinson: <unk>.

David Rawlinson: And that in that market.

David Rawlinson: <unk> largely out run.

David Rawlinson: Slightly even if anything more difficult.

David Rawlinson: Mark set of market conditions, and so I'd say that's been if you look over the last few years, one of our strongest performing.

David Rawlinson: And so I'd say that, if you look over the last few years, it's been, one of our strongest performing, most consistent, and strongest performing businesses. And it's a business that is growing and continues to grow. And so we feel very good. Another thing I'd just note about Japan is that it is our core business model. So we do, essentially, with regional adjustments, essentially what we do across the QVC and HSN businesses and all of our other markets.

David Rawlinson: Most consistent and strongest performing businesses and it's a business that is growing and continues to grow. So we feel very good other thing I'd. Just note about Japan is that it is our core business model. So we do essentially with regional.

David Rawlinson: With the regional adjustments essentially what we do across the QVC and HSN busy.

David Rawlinson: Businesses and all of our other markets.

David Rawlinson: We share talent across we've had people who led that business that have gone on to lead other businesses across the portfolio.

David Rawlinson: We share talent across. We've had people who have led that business that have gone on to lead other businesses across the portfolio and vice versa. And in fact, I will be in Japan myself next month.

David Rawlinson: And vice versa.

David Rawlinson II: In fact, I will be in Japan myself in, I think, next month. And so we're very excited about the business. It's material to the overall results. In terms of whether we ever monetize it, I would say it's a core business. I've been pretty careful to delineate core and non-core businesses. It's a core business. But we're always looking at every opportunity to create shareholder value. We'll continue to do that like all businesses. But we're very happy with the performance of Japan and what it's meant for the overall portfolio.

David Rawlinson: In fact, I will be in Japan.

David Rawlinson: Myself and.

David Rawlinson: I think next month and so.

David Rawlinson: And so we're very excited about the business's contribution to the overall results. In terms of whether we've ever monetized it, I would say it's a core business. I've been pretty careful to delineate core and non-core businesses. It's a core business, but we're always looking at every opportunity to create shareholder value. We'll continue to do that, like all businesses, but we're very happy with the performance of Japan and what it's meant for the overall portfolio.

David Rawlinson: We're very excited about the business is material to the overall results in terms of whether we ever monetize it I would say.

David Rawlinson: Core business side.

David Rawlinson: <unk> been pretty careful to delineate core and noncore businesses, it's a core business, but we're always looking at every opportunity to create shareholder value will continue to do that like like all businesses, but we're very happy with the performance of Japan, and what it's meant for the overall port.

David Rawlinson: Palio.

Carla Casella: Okay, great. Thanks a lot.

Speaker Change: Okay, great. Thanks, a lot.

Carla Casella: Okay. Great. Thanks a lot.

Operator: Our next questions are a follow-up from the line of William Reuter with Bank of America. Please proceed with your questions.

Carla Casella: Our next questions are follow up from the line of William Reuter with Bank of America. Please proceed with your question.

Bill Wafford: Our next questions are follow-up from the line of William Reuter with Bank of America. Please proceed with your questions.

Operator: Our next questions are follow-up from the line of William Reuter with Bank of America. Please proceed with your questions.

William Reuter: Hi, I just have two that I think are relatively quick. The first is that there are clearly a lot of big names associated with the Age of Possibility tour and marketing program, some of which you mentioned may be kind of staying on in a permanent role. Should we think about a meaningful increase in that, whether you want to call those marketing dollars, advertising, whatever those funds would be allocated towards, should that be a meaningful increase?

William Reuter: Hi, I just have two that I think are relatively quick first.

Ben Oren: Hi. I just have two that I think are relatively quick. The first, there are clearly a lot of big names associated with the Age of Possibility tour and marketing program, some of which you mentioned may be kind of staying on in a permanent role. Should we think about a meaningful increase in those, whether you want to call those marketing dollars, advertising, whatever those funds would be allocated towards? Should that be a meaningful increase? No. I wouldn't expect that in terms of how we've laid out the year was fully anticipated with kind of the launch of Q50. I don't expect any meaningful change in our level of marketing spend across the portfolio, or maybe a reallocation of funds in some minor way, but nothing material, no. Cool.

William Reuter: Hi. I just have two that I think are relatively quick. The first, there are clearly a lot of big names associated with the Age of Possibility tour and marketing program, some of which you mentioned may be kind of staying on in a permanent role. Should we think about a meaningful increase in those, whether you want to call those marketing dollars, advertising, whatever those funds would be allocated towards? Should that be a meaningful increase?

William Reuter: There are clearly a lot of big names associated with the agents possibility tour and marketing program. Some of which you mentioned maybe kind of staying on in a permanent role should we think about a meaningful increase and those whether you want to call those marketing dollars advertising whatever those funds would be allocated.

William Reuter: Towards should that be a meaningful increase.

David Rawlinson: I wouldn't, no, I wouldn't expect that in terms of, you know, how we've laid out the year as fully anticipated with, you know, the launch of Q50. I don't expect any meaningful change in our level of marketing spend across the portfolio or maybe a reallocation of funds in, you know, some minor way, but nothing material.

Speaker Change: I wouldn't know.

David Rawlinson II: No. I wouldn't expect that in terms of how we've laid out the year was fully anticipated with kind of the launch of Q50. I don't expect any meaningful change in our level of marketing spend across the portfolio, or maybe a reallocation of funds in some minor way, but nothing material, no.

William Reuter: Don't expect that in terms of how we've laid out the year was fully anticipated with kind of the launch of <unk> 50.

David Rawlinson: I don't expect any meaningful change in our level of marketing spend across the portfolio or maybe a reallocation of funds and some minor way, but nothing material no.

William Reuter: Cool. Then the second one, you've mentioned that some of the more discretionary product categories that we're seeing weakness across all retailers. You've seen the same thing. Are you going to be changing your mix much this summer that will change kind of the margin profile to some kind of lower margin, less discretionary categories?

William Reuter: Cool. And then the second one, you mentioned some of the more discretionary product categories that we're seeing weakness across all retailers. You've seen the same thing. Are you going to be changing your mix much this summer that will change the kind of margin profile to some kind of lower margin, less discretionary categories? No.

David Rawlinson: And then the second one.

Ben Oren: And then the second one, you've mentioned that some of the more discretionary product categories that we're seeing weakness across all retailers. You've seen the same thing. Are you going to be changing your mix much this summer that will change kind of the margin profile to some kind of lower margin, less discretionary categories?

William Reuter: You've mentioned that some of the more discretionary product categories that we're seeing weakness across all retailers you've seen the same thing are you going to be changing our mix. Much. This summer that will change kind of the margin profile to some kind of lower margin less discretionary categories.

William Reuter: No I don't think so I think youll continue to see us shift.

David Rawlinson: No, I don't think so. I think you'll continue to see us shift slightly away from electronics. We're dedicating less air time there, and I think we don't see the same type of innovation or demand across electronics. That being said, we do see an innovation cycle happening, and we're starting to hear from some of the manufacturers that they may want to lean into an innovation cycle. If we see an innovation cycle happening, I think we have the ability to get back into that market relatively quickly. We're continuing.

David Rawlinson II: No. I don't think so. I think you'll continue to see a shift slightly away from electronics. We're dedicating less airtime there. And I think we don't see the same type of innovation or demand across in electronics. That being said, if we see an innovation cycle happening and we're starting to hear from some of the manufacturers that they may want to lean into an innovation cycle, if we see an innovation cycle happening, I think we have the ability to get back into that market relatively quickly. We're continuing. I think we're on a nice string in terms of gross margin expansion. Some of that's clearance, but some of that's also being mindful of which categories we're pushing and what the margin profile on those categories are. We're going to continue to maintain that discipline.

David Rawlinson: Slightly away from electronics.

David Rawlinson: Dedicating less airtime.

David Rawlinson: Their end of things.

David Rawlinson: We don't.

David Rawlinson: We don't see the same type of innovation, our demand across electronics that being said, if we see an innovation cycle happening and we're starting to hear from some of the manufacturers that they may want to lean into.

David Rawlinson: Innovation cycle, if we see an innovation cycle happening I think we'd have the ability to get back into that market relatively quickly.

David Rawlinson: Continuing and I think we're on a nice string in terms of gross margin expansion some of Thats clearance, but some of that's also being mindful of which categories, we're pushing and what the margin profile on those on those categories are we're going to continue to maintain that discipline and so.

David Rawlinson: I think we're on a nice string in terms of gross margin expansion. Some of that is clearance, but some of that is also being mindful of which categories we're pushing and what the margin profile of those categories is. We're going to continue to maintain that discipline, and we're going to continue to lean into higher margin categories when it meets the demand we're seeing from our customers. To your question, I don't see us going into lower margin categories at any sort of scale.

David Rawlinson II: And we're going to continue to lean into higher margin categories when it meets the demand we're seeing from our customer. So I don't see, to your question, I don't see us going into lower margin categories at any sort of scale. We'll be opportunistic. We'll have to continue to read the customer, and we'll follow the customer where she goes. But there's nothing that we see so far that should suggest we can't continue to make good progress on the gross margin profile of the business.

David Rawlinson: And we're going to continue to lean into higher margin categories. When it meets the demand we're seeing from our from our customers. So I don't see to your question I don't see.

David Rawlinson II: We're going to continue to lean into higher margin categories when it meets the demand we're seeing from our customer. So I don't see, to your question, I don't see us going into lower margin categories at any sort of scale. We'll be opportunistic. We'll have to continue to read the customer, and we'll follow the customer where she goes. But there's nothing that we see so far that should suggest we can't continue to make good progress on the gross margin profile of the business.

David Rawlinson: Us going into lower margin categories that any sort of.

David Rawlinson: We'll be opportunistic. We'll have to continue to read the customer, and we'll follow the customer where she goes, but there's nothing that we see so far that should suggest we can't continue to make good progress on the gross margin profile of the business.

David Rawlinson: Scale will be opportunistic we will have to continue to read the customer end.

David Rawlinson: We'll follow the customer where she goes but.

David Rawlinson: There is nothing that we see so far that should suggest we can't continue to make.

David Rawlinson: Good progress on the gross margin profile of the business.

Ben Oren: Great. Thank you. That's all from me.

William Reuter: Great. Thank you. That's all from me.

Speaker Change: Great. Thank you that's all for me.

David Rawlinson: Yeah.

David Rawlinson: Our next question is from a follow up from the line of Carew Martin with Jefferies. Please proceed with your questions.

Operator: Our next question is a follow-up from the line of Karou Martinson with Jeffries. Pleased to see you with your question. Uh, just some housekeeping.

Bill Wafford: Our next question is a follow-up from the line of Guru Martinson with Jefferies. Please proceed with your questions.

Operator: Our next question is a follow-up from the line of Karru Martinson with Jefferies. Please proceed with your questions.

Karou Martinson: Just some housekeeping, what was the split for QXH between QVC and Home Shopping Network?

Karru Martinson: Just some housekeeping. What was the split for QXH between QVC and Home Shopping Network?

Karou Martinson: Just some housekeeping what was the split for <unk> between QVC and home shopping network.

Karou Martinson: I don't think we talk about that.

David Rawlinson: I don't think we talk about that publicly. Obviously, QVC is the bigger of the two, but I don't think we've reported that. Okay, and...

David Rawlinson II: I don't think we talk about that publicly. Obviously, QVC is the bigger of the two, but I don't think we've reported the split publicly.

David Rawlinson: Publicly obviously QVC is the bigger of the two but I don't think we have reported this split.

Karou Martinson: Okay, and then understand that existing customers spend about, you know, 1.6K on that, but those best customers that you reference, what do they spend annually?

David Rawlinson: Okay and then.

Karru Martinson: Okay. And then I understand that existing customers spend about $1,600 on that. But those best customers that you referenced, what do they spend annually?

David Rawlinson: I understand that the existing customers spend about $1 6K on that but those best customers that you referenced what did they spend annually.

Speaker Change: Our best customers are around 3900, just under $4000 and that number has continued to grow over time.

David Rawlinson: The best customers are around $3,900, just under $4,000, and that number has continued to grow over time.

David Rawlinson II: Best customers are around $3,900, just under $4,000. And that number has continued to grow over time.

Karou Martinson: Thank you very much, guys; I appreciate it.

Karru Martinson: Thank you very much, guys. Appreciate it.

Speaker Change: Thank you very much guys I appreciate it.

David Rawlinson: Great. And with that, thank you to the listening audience. We look forward to speaking with you next quarter, if not earlier, and operator, I think we can close the line.

David Rawlinson II: Great. With that, thank you to the listening audience. We look forward to speaking with you next quarter, if not earlier. Operator, I think we can close the line.

Greg Maffei: Great. With that, thank you to the listening audience. We look forward to speaking with you next quarter, if not earlier. Operator, I think we can close the line.

Speaker Change: Great and with that thank you to the listening audience.

David Rawlinson: We look forward to speaking with you next quarter, if not earlier and operator I think we can close the line.

Operator: Thank you. This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.

Speaker Change: Thank you. This will conclude today's conference you may disconnect. Your lines at this time. Thank you for your participation.

Bill Wafford: Thank you. This will conclude today's conference. Let me disconnect your lines at this time. Thank you for your participation.

Operator: Thank you. This will conclude today's conference. Let me disconnect your lines at this time. Thank you for your participation.

Q1 2024 Qurate Retail Group Inc Earnings Call

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