Q2 2024 Qurate Retail Inc Earnings Call

August 8, 2024

Ladies and gentlemen, welcome to the Q-Rate Retail Inc. 2024 Q2 earnings call.

Operator: before Q2 earnings call. During the presentation, all participants will be in the listen-only mode. Afterwards, we will conduct a question-and-answer session.

Operator: During the presentation, all participants will be in the listen-only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please press star 1 on the telephone. As a reminder, this conference will be recorded on August 8th.

Speaker Change: During the presentation, all participants will be in the listen-only mode. Afterwards, we will conduct a question-and-answer session.

Operator: At that time, if you have a question, please press star one on your telephone. As a reminder, this conference will be recorded August 8th.

Speaker Change: at that time if you have a question please press star one on a telephone

As a reminder, this conference will be recorded on August 8th.

Claire Adams: I would now like to turn the call over to Claire Adams, Senior Manager Investor Relations. Please go ahead.

clair adams: i would now like to turn the call over to clair adams senior manager investor relations please go ahead

Claire 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 QRIT 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 QRIT Retail's expectations with regard thereto, or any change in events, conditions, or circumstances on which any such statement is based.

Claire 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 Curate 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 its expectations with regard thereto, or any change in events, conditions, or circumstances on which any such statement is based.

Claire: 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. Please note that we have published slides to a company that we're going to...

Speaker Change: good morning before we begin we'd like to remind everyone that this call includes certain forward-looking statements within the meeting of the private securities litigation form act one one thousand nine five

clair adams: actual events or results could differ materiallydue to an hour of risks and uncertainties including those mentioned in the most recent forms ten -k and ten q filed by our company and qvc with that sec

David Rawlinson: 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. On today's call, we will 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 note and schedules 1 to 2, can be found in the earnings press release issued today or our earnings presentation, which are available on our website.

Claire Adams: 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. On today's call, we will 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 note and schedules 1 to 2, can be found in the earnings press release issued today or our earnings presentation, which are available on our website.

These forward-looking statements speak only as of the date of this call, and Curate Retail expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein.

clair adams: to reflect any change in Curate Retail's expectations with regard thereto, or any change in events, conditions, or circumstances on which any such statement is based.

Claire Adams: Please note that we have published slides to a company that earnings release. On today's call, we will discuss certain non-GAAT financial measures, including adjusted OIVA, adjusted OIVA and regarding the comparable GAAT metrics along with required definitions and reconciliation, including preliminary note and scheduled one to two. Can be found in the earnings press release issued today or our earnings presentation, which are available on our website.

Claire Adams: Please note that we have published slides for a company that we're going to... On today's call, we will discuss certain non-GAAP financial measures, including Adjusted OEBDA, Adjusted OEBDA Margin, Free Cash Flow, and Constant Currency. Information regarding the comparable GAAP metrics, along with required definitions and reconciliations, including Preliminary Note and Schedules 1-2, can be found in the earnings press release issued 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, Greg Messiaen. Now I'll hand the call over to David Rawlinson.

clair adams: Please note that we have published slides to accompany the earnings release.

Speaker Change: ontoday's call we will discuss certain n-gaap financial measures including adjusted obita adjustedto evbit mmargin free cash flow and constant currencies

clair adams: information regarding the comparable gaap metrics along with required definitions and reconciliations including to liminary note and schedulle one into two can be found in our earnings press release issued today or our earranges presentation which are available on our website

David Rawlinson: 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. Thank you, Claire. And good morning to everyone. Thank you for joining us today and for your interest in Qurate Retail. We delivered a solid quarter of earnings. While revenue was in line with overall discretionary retail and a challenged macro backdrop, we expanded gross margin and grew adjusted OIBDA through our continuing focus on cost and efficiency. Total company revenue declined, which reflected lower volume, particularly at QXH and Cornerstone brands. QXH revenue was pressured by macro factors, including inflation, as consumers continue to spend mostly on necessities and less on discretionary purchases.

Claire Adams: 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, speaking on the earnings call, we have QRIT Retail President and CEO David Rollinson, QRIT Retail Group CFO Bill Wofford, and QRIT Retail Executive Chairman present site.

Speaker Change: 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, Greg Messiaen. Now I'll hand the call over to David Rawlinson.

David Rollinson: Now I'll hand a call over to David Rollinson. Thank you, Claire, and good morning to everyone. Thank you for joining us today and for your interest in QRIT Retail. We delivered a solid quarter of earnings, while revenue was inline with overall discretionary retail and a challenging macro backdrop. We expanded gross margin and grew adjusted OIVA though our continuing focus on cost and efficiency. Total company revenue declined, which reflected lower volume, particularly at QXH and Cornerstone brands. QXH revenue was pressured by macro factors, including inflation, as consumers continue to spend mostly on necessities and less on discretionary purchases.

David Rawlinson: Thank you, Claire. And good morning to everyone. Thank you for joining us today and for your interest in Qurate Retail. We delivered a solid quarter of earnings. While revenue was in line with overall discretionary retail and a challenged macro backdrop, we expanded gross margin and grew adjusted OIBDA through our continuing focus on cost and efficiency. Total company revenue declined, which reflected lower volume, particularly at QXH and Cornerstone brands. QXH revenue was pressured by macro factors, including inflation, as consumers continue to spend mostly on necessities and less on discretionary purchases.

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

Unnamed Speaker: Thank you, Claire. And good morning to everyone.

David Rawlinson: Thank you for joining us today and for your interest in Curate Retail. We delivered a solid quarter of earnings, while revenue was in line with overall discretionary retail in a challenging macro backdrop. We expanded gross margin and grew adjusted OEBDOT through our continuing focus on cost and efficiency. Total company revenue declined, which reflected lower volume, particularly at QXH and Cornerstone Brands. QXH revenue was pressured by macro effects, including inflation, as consumers continue to spend mostly on necessities and less on discretionary purchases. The housing market has continued to pressure the cornerstone business as existing home sales and housing starts are historically low, and mortgage rates remain at peak levels.

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

Speaker Change: We delivered a solid quarter of earnings while revenue was in line with overall discretionary retail in a challenge macro backdrop. We expanded gross margin and grew adjusted OEBDOT through our continuing focus on cost and efficiency.

Speaker Change: Total company revenue declined, which reflected lower volume, particularly at QXH and Cornerstone brands.

Speaker Change: QXH revenue was pressured by macro factors.

Speaker Change: including inflation as consumers continue to spend mostly on necessities and less on discretionary purchases.

David Rollinson: The housing market has continued to pressure the cornerstone business, as existing home sales and housing starts are historically low, and mortgage rates remain at peak levels. Despite these macro and top line pressures, we are pleased to report gross margin expansion for the fifth consecutive quarter, with margin expansion at all of our business units. These gains were due to continued product margin and fulfillment improvement from our Project Athens initiatives. In addition to gross margin gains, we remained disciplined in cost management and lowered total company SG&A expenses, resulting in total company adjusted OIVA dog growth and adjusted OIVA dog margin expansion for the fourth consecutive quarter.

Unnamed Speaker: Thank you for joining us today and for your interest in Curate Retail. The housing market has continued to pressure the cornerstone business as existing home sales and housing starts are historically low, and mortgage rates remain at peak levels. These gains were due to continued product margin and fulfillment improvement from our Project Athens initiative. Now, moving on to QXH customers and merchandise. On a quarterly basis, QXH's customer count declined 5% in line with our volume decline.

David Rawlinson: The housing market has continued to pressure the Cornerstone business as existing home sales and housing starts are historically low, and mortgage rates remain at peak levels. Despite these macro and top-line pressures, we are pleased to report gross margin expansion for the fifth consecutive quarter, with margin expansion at all of our business units. These gains were due to continued product margin and fulfillment improvement from our Project Athens initiatives. In addition to gross margin gains, we remain disciplined in cost management and lowered total company SG&A expenses, resulting in total company adjusted OIBDA growth and adjusted OIBDA margin expansion for the fourth consecutive quarter. We improved profitability in our core video commerce businesses, with QXH adjusted OIBDA up 5% and QVC International adjusted OIBDA up 8% in constant currency.

Speaker Change: the housing market has continued to pressure the cornerstone business as existing home sales and housing starts are historically low in mortgage rates remain at peak levels

David Rawlinson: Despite these macro and top-line pressures, we are pleased to report gross margin expansion for the fifth consecutive quarter, with margin expansion at all of our business levels. These gains were due to continued product margin and fulfillment improvement from our Project Athens initiative. In addition to gross margin gains, we remained disciplined in cost management and lowered total company SG&A expenses, resulting in total company adjusted OEBDA growth and adjusted OEBDA margin expansion for the fourth consecutive quarter.

Speaker Change: Despite these macro and top-line pressures, we are pleased to report gross margin expansion for the fifth consecutive quarter with margin expansion at all of our business units.

Speaker Change: these gains were due to continued product margin and fulfillment improvement from our project athens initiatives

Speaker Change: in addition to gross margin gains.

Speaker Change: We remain disciplined in cost management and lowered total company SG&A expenses, resulting in total company adjusted OEBDOT growth and adjusted OEBDOT margin expansion for the fourth consecutive quarter.

David Rollinson: We improved profitability in our core video commerce businesses, with QXH adjusted OIVA dog up 5 percent and QVC International adjusted OIVA dog up 8 percent and constant current. Total company profitability was pressured by the crime and cornerstone from continued housing market challenges, as well as some incremental marketing expense. Looking at the QXA business in more detail, this quarter we invested in the Age of Possibility campaign we launched in April where we gathered 50 powerful influential women, including celebrities, business women, and activists, to be QVC brand ambassadors. Since launch, we have experienced strong initial reaction to this campaign with 38 billion earned media impressions, 330,000 new Facebook community members, a nearly 200% increase in the number of QVC social followers, and more than a million visits to QVC's campaign website.

Speaker Change: We improved profitability in our core video commerce businesses with QXH adjusted OIVD up 5% and QVC International adjusted OIVD up 8% in constant currency.

David Rawlinson: We improved profitability in our core video commerce businesses with QXH adjusted OEBDA of 5% and QVC International adjusted OEBDA of 8% and constant current. However, total company profitability was pressured by a decline and cornerstone from continued housing market challenges as well as some incremental marketing expense.

David Rawlinson: Total company profitability was pressured by a decline in Cornerstone from continued housing market challenges as well as some incremental marketing expense. Looking at the QXH business in more detail, this quarter, we invested in the Age of Possibility campaign we launched in April, where we gathered 50 powerful, influential women, including celebrities, businesswomen, and activists, to be QVC brand ambassadors. Since launch, we have experienced strong initial reaction to this campaign, with 38 billion earned media impressions, 330,000 new Facebook community members, a nearly 200% increase in the number of QVC social followers, and more than a million visits to QVC's campaign website. We saw strong demand from Age of Possibility-related brands in Q2, with collective demand for the existing 12 brands up low double digits after the campaign launch and particular strength from Valerie Parr Hill, Kim Gravel, Apparel & Beauty, and Doris Dalton's Doll 10.

Speaker Change: Total company profitability was pressured by a decline and cornerstone from continued housing market challenges as well as some incremental marketing expense.

David Rawlinson: Looking at the QXH business in more detail, this quarter we invested in the Age of Possibility campaign we launched in April, where we gathered 50 powerful, influential women, including celebrities, businesswomen, and activists, to be QVC brand ambassadors. Since launch, we have experienced strong initial reaction to this campaign, with 38 billion earned media impressions, 330,000 new Facebook community members, a nearly 200% increase in the number of QVC social followers, and more than a million visits to QVC's campaign website.

Speaker Change: Looking at the QXH business in more detail, this quarter we invested in the Age of Possibility campaign we launched in April , where we gathered 50 powerful influential women, including celebrities, businesswomen, and activists to be QVC brand ambassadors.

Speaker Change: Since launch, we have experienced strong initial reaction to this campaign.

Speaker Change: with 38 billion earned media impressions, 330,000 new Facebook community members, a nearly 200% increase in the number of QVC social followers, and more than a million visits to QVC's campaign website.

David Rollinson: We saw strong demand from Age of Possibility related brands in Q2, with collective demand for the existing 12 brands of low double digits after the campaign launch and particular strength from Valerie Farhill, Kim Carvelle, Apparel and Beauty, and Doris Dalton's Dalton. One of our age of possibility when essential 50 is Jennifer Dawson. We would like to get with Jennifer and all of those who celebrate Happy National Pickleball Day. We are also pleased to announce that we recently signed a multi-year agreement with USA Pickleball, the fastest growing sport in America for three consecutive years. Pickleball has 8.9 million players in 2023 and 50,000 attendees and 2.6 million television viewers for its 2023 National Championship.

David Rawlinson: We saw strong demand from age of possibility-related brands in Q2, with collective demand for the existing 12 brands up low double digits after the campaign launch and particular strength from Valerie Farhill, Kim Corbell Apparel and Beauty, and Doris Dalton's Doll Tent. One of our Age of Possibility Quintessential 50 is Jennifer Dawson.

Speaker Change: We saw strong demand from age of possibility related brands in Q2.

Speaker Change: with collective demand for the existing 12 brands.

Speaker Change: up low double digits

Speaker Change: after the campaign launch and particular strength from valallery far hill can prevail apparel in beauty and dorors dlton's dolltsin

David Rawlinson: One of our Age of Possibility Quintessential 50 is Jennifer Dawson. We would like to wish Jennifer and all of those who celebrate Happy National Pickleball Day. We are also pleased to announce that we recently signed a multi-year agreement with USA Pickleball, the fastest-growing sport in America, for 3 consecutive years. Pickleball had 8.9 million players in 2023 and 50,000 attendees and 2.6 million television viewers for its 2023 national championship. QVC will be the exclusive retail partner and exclusive broadcast partner of USA Pickleball for its Golden Ticket events as well as its nationals tournament each November. QVC will broadcast the tournaments live on QVC+, create unique behind-the-scenes content, and curate products in partnership with USA Pickleball. Now, moving on to QXH customers and merchandise. On a quarterly basis, QXH customer count declined 5% in line with our volume decline.

Jennifer Dawson: one of our age of possibility qu essential ditty is jner dawson we would like to getit with jennifer and all of those who celebrate happy national pickof all day

David Rawlinson: We would like to wish Jennifer and all of those who celebrate Happy National Pickleball Day. We're also pleased to announce that we recently signed a multi-year agreement with USA Pickleball, the fastest growing sport in America for three consecutive years. Pickleball had 8.9 million players in 2023 and 50,000 attendees and 2.6 million television viewers for its 2023 national championship. QVC will be the exclusive retail partner and exclusive broadcast partner of USA Pickleball for its golden ticket events as well as this national championship each November.

Speaker Change: We are also pleased to announce that we recently signed a multi-year agreement with USA Pickleball, the fastest growing sport in America for three consecutive years.

Speaker Change: Pickleball had 8.9 million players in 2023 and 50,000 attendees and 2.6 million television viewers for its 2023 National Championship.

David Rollinson: QVC will be the exclusive retail partner and exclusive broadcast partner of USA Pickleball for its gold and ticket events, as well as this national tournament each November. QVC will broadcast the tournament's live on QVC Plus, create unique behind-the-scenes content and QA products, and partnership with USA Pickleball.

Speaker Change: QVC will be the exclusive retail partner and exclusive broadcast partner.

Speaker Change: of USA Pickleball for its Golden Ticket events as well as this Nationals tournament each November . QVC will broadcast the tournaments live on QVC+, create unique behind-the-scenes content, and curate products in partnership with USA Pickleball.

David Rawlinson: QVC will broadcast the tournaments live on QVC+, create unique behind-the-scenes content, and curate products in partnership with USA Pickleball. Now, moving on to QXH Customers and Merchandise. On a quarterly basis, QXH's customer count declined 5% in line with our volume decline. However, as you can see on slide 8 of our presentation, our count on a trailing 12-month basis was down only 1% sequentially in the 12 months ending June 30th compared to March. This continues to show the stabilization of our fall.

David Rollinson: Now moving on to QXH customers and merchandise. On a quarterly basis, QXH customer count declined 5% in line with volume decline. However, as you can see on flat 8 of our presentation, our count on a trailing 12-month basis was down only 1% sequentially in the 12 months ending June 30, compared to March. This continues to show stabilization of our file. Our existing customers continue to purchase at healthy levels, spending on average $1,665 and purchasing 32 items in the 12 months ending June 30. That is up 8% and 6% year-on-year, respectively. Retention of our existing customer file was also up in the quarter.

Speaker Change: Now, moving on to QXH Customers and Merchandise.

Speaker Change: On a quarterly basis, QXH customer count declined 5% in line with our volume decline.

David Rawlinson: However, as you can see on slide 8 of our presentation, our count on a trailing 12-month basis was down only 1% sequentially in the 12 months ending 30 June compared to March. This continues to show stabilization of our file. Our existing customers continue to purchase at healthy levels, spending on average $1,665 and purchasing 32 items in the 12 months ending 30 June. That is up 8% and 6% year-over-year, respectively. Retention of our existing customer file was also up in the quarter. At QVC, our best customers, those who buy 20 or more items annually, also continue to purchase at very attractive levels. In the 12 months ending 30 June, they bought 76 items and spent $3,950 on average, up 3% and 6% year-over-year, respectively.

Unnamed Speaker: However, as you can see on slide 8 of our presentation, our count on a trailing 12-month basis was down only 1% sequentially in the 12 months ending June 30th, compared to March. This continues to show stabilization of our fall.

Speaker Change: However, as you can see on slide 8 of our presentation,

Speaker Change: Our count on a trailing 12-month basis was down only 1% sequentially in the 12 months ending June 30th compared to March.

Unnamed Speaker: Our existing customers continue to purchase at healthy levels, spending on average $1,665 and purchasing 32 items in the 12 months ending June 30th. That is up 8% and 6% year-on-year, respectively. Retention of our existing customer file was also up in the quarter. At QVC, our best customers, those who buy 20 or more items annually, also continue to purchase at very attractive levels. In the 12 months ending June 30th, they bought 76 items and spent $3,950 on average, up 3% and 6% year-on-year, respectively.

David Rawlinson: Our existing customers continue to purchase at healthy levels, spending on average $1,665 and purchasing 32 items in the 12 months ending June 30th. That is up 8% and 6% year-on-year, respectively. Retention of our existing customer file was also up in the quarter. At QVC, our best customers, those who buy 20 or more items annually, also continue to purchase at very attractive levels. In the 12 months ending June 30th, they bought 76 items and spent $3,950 on average, up 3% and 6% year-on-year, respectively.

Speaker Change: This continues to show stabilization of our fall.

Speaker Change: our existing customers continue to purchase a healthy levels spending on average one thousand and six hundred and sixty five dollars and purchasing thirty two items in the twelve months in dig june thirtieth that is up eight percent and six percent year-on year respectively

Speaker Change: retention of our existing customer bile was also up in the quarter

David Rollinson: At QVC, our best customers, those who buy 20 or more items annually, also continue to purchase at very attractive levels. In the 12 months ending June 30, they bought the 76 items and spent $3,950 on average, up 3% and 6% year-on-year, respectively. Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Adjusted Orbit Out Marching was driven by gross margin expansion and favorable administrative expenses. Bill will provide more details on our Adjusted Orbit Out expansion momentarily.

Speaker Change: at qvc our best customers those who buy twenty or more items annually also continue to purchase at very attractive levels

Speaker Change: In the 12 months ending June 30th, they bought 76 items and spent $3,950 on average, up 3% and 6% year-on-year, respectively.

David Rawlinson: We had modest growth in new customers in Q2, marking the fourth consecutive quarter of new customer growth. On a trailing 12-month basis, the number of new customers increased 7%. From a merchandise perspective, consumers remain mindful of their wallet and selective in their discretionary spending. In culinary, demand grew for innovative kitchen electrics such as Ninja Woodfire Grills and ice cream and ice makers. We also saw strength in cookware from our celebrity chefs Carla Hall, Wolfgang Puck, and Curtis Stone. In electronics and home, we saw strength in functional products such as portable power from EcoFlow, e-bikes, neckbands, and new launches from Dr. Gundry, OMI, and supplements. Skechers, Ryka, and Revitalign sold well in footwear. Celebrity and new merchandise launches helped excite our customers in fashion.

Unnamed Speaker: We had modest growth in new customers in the second quarter, marking the fourth consecutive quarter of new customer growth. On the trail in 12-month phases, the number of new customers increased 7%. From a merchandise perspective, consumers remain mindful of their wallets and selective in their discretionary spending. In the culinary category, demand grew for innovative kitchen electrics such as Ninja wood-fire grills and ice cream and ice makers.

David Rawlinson: We had modest growth in new customers in the second quarter, marking the fourth consecutive quarter of new customer growth. On the trail in 12-month phases, the number of new customers increased 7%. From a merchandise perspective, consumers remain mindful of their wallets and selective in their discretionary spending. In the culinary category, demand grew for innovative kitchen electrics such as Ninja wood-fire grills and ice cream and ice makers.

Speaker Change: We had modest growth in new customers in the second quarter, marking the fourth consecutive quarter of new customer growth. On the trail in 12-month basis, the number of new customers increased 7%.

Speaker Change: From a merchandise perspective, consumers remain mindful of their wallet and selective in their discretionary spending, and culinary demand group for innovative kitchen electrics such as Ninja wood fire grills and ice cream and ice makers.

David Rawlinson: We also saw strength in cookware from our celebrity chefs Carla Hall, Wolfgang Puck, and Curtis Stone. In electronics and home, we saw strength in functional products such as portable power from EcoFlow, e-bikes, neck fans, and new launches from Dr. Gundy and OMI and Supplements. Skechers, Ryka, and Revitalon sold well in footwear. Celebrity and New Merchandise launches helped excite our customers and fast. These included brands from our new Q50 Brand Ambassadors, as well as new apparel launches from Christine Brinkley, Katy Perry's Shoe Line, and our 30th Anniversary Collection with Diane Gilman. Our customers responded less favorably to clearance apparel, swimwear, handbags, and higher-cost items such as mattresses and furniture, as well as lawn, garden, and grass.

Unnamed Speaker: We also saw strength in cookware from our celebrity chefs Carla Hall, Wolfgang Puck, and Curtis Stone. In electronics and home, we saw strength in functional products such as portable power from EcoFlow, e-bikes, neck fans, and new launches from Dr. Gundy and OMI and Supplements. Celebrity and New Merchandise launches helped excite our customers in fashion. These included brands from our new Q50 Brand Ambassadors, as well as new apparel launches from Christine Brinkley, Katy Perry's Shoe Line, and our 30th Anniversary Collection with Diane Gilman. Our customers responded less favorably to clearance apparel, swimwear, handbags, and higher-cost items such as mattresses and furniture, as well as lawn, garden, and crafts.

Speaker Change: We also saw strength in cookware from our celebrity chefs Carla Hall, Wolfgang Puck, and Curtis Stone.

Speaker Change: In electronics and home, we saw strength in functional products, such as portable power from EcoFlow, e-bikes, neck fans, and new launches from Dr. Gundy and OMI in supplements.

Speaker Change: Skechers, Rika, and Revitalon sold well in footwear.

Speaker Change: Celebrity and new merchandise launches help excite our customers in fashion.

David Rawlinson: These included brands from our new Q50 brand ambassadors as well as new apparel launches from Christie Brinkley, Katy Perry Shoe Line, and our 30th anniversary collection with Diane Gilman. Our customers responded less favorably to clearance apparel, swimwear, handbags, and higher-cost items such as mattresses and furniture as well as lawn, garden, and crafts. QXH produced its best adjusted OIBDA margin rate in the past eight quarters, even with investment in the Age of Possibility campaign to better serve the attractive demographic of women 50-plus as well as the deleveraging of fixed costs due to lower volume. Adjusted OIBDA margin was driven by gross margin expansion and favorable administrative expenses. Bill will provide more details on our adjusted OIBDA expansion momentarily. QVC International delivered another very solid quarter. We reported stable revenue and adjusted OIBDA growth for the fourth consecutive quarter.

Speaker Change: these included brands from our new q fifty brand ambassadors as well as new apparel launches from christine brinkley katiey payry shoe one and our thirtieth anniversary collection with dying gilman

Speaker Change: Our customers responded less favorably to clearance apparel, swimwear, handbags, and higher cost items such as mattresses and furniture, as well as lawn, garden, and crafts.

David Rawlinson: QXH produced its best-adjusted Oividon margin rate in the past eight quarters, even with investment in the Age of Possibility campaign to better serve the attractive demographic of women 50 plus, as well as the leveraging of fixed costs due to lower volume. Adjusted OIDA dot margin was driven by gross margin expansion and favorable administrative expenditures. Bill will provide more details on our adjusted order to our expansion momentarily.

Unnamed Speaker: QXH produced its best-adjusted Oivodon margin rate in the past eight quarters, even with investment in the Age of Possibility campaign to better serve the attractive demographic of women 50 plus, as well as the leveraging of fixed costs due to lower volume. Adjusted OIDA dot margin was driven by gross margin expansion and favorable administrative expenditures. Bill will provide more details on our adjusted order to expansion momentarily.

Speaker Change: two x produced its best adjusted o bit on margin rate in the past eight quarters

Speaker Change: even with investment in the Age of Possibility campaign to better serve the attractive demographic of women 50 plus, as well as the leveraging of fixed costs due to lower volume.

Speaker Change: Adjusted OIDA dot margin was driven by gross margin expansion and favorable administrative expenses.

Bill Wofford: bill will provide more details on our adjusted orbitdox expansion momentarily

David Rollinson: QVC International delivered another very solid quarter. We reported stable revenue and adjusted orbit out growth for the fourth consecutive quarter. Revenue performance was led by QVC UK and Japan of mid and low single digits, respectively. Both countries saw sales growth in most categories, with the UK seeing particular strength in beauty, jewelry, accessories, and hung. And Japan seeing strength in jewelry, electronics, and apparel. QVC's international adjusted orbit out growth was driven by strong product margin expansion and cost control. Partially offset by fulfillment pressure from higher volume wages and carrier rates.

David Rawlinson: QVC International delivered another very solid quarter. We reported stable revenue and adjusted OEBDOT growth for the fourth consecutive quarter. Revenue performance was led by QVC UK and Japan, which saw revenue growth in most categories, with the U.K. seeing particular strength in beauty, jewelry, accessories, and home, and Japan seeing strength in jewelry, electronics, and apparel. QVC's international adjusted oevidai growth was driven by strong product margin expansion and cost control, partially offset by fulfillment pressure from higher volume, wages, and carrier rates. At Cornerstone, revenue declined 14% due to low demand from the continued housing pressures I mentioned earlier.

Unnamed Speaker: QVC International delivered another very solid quarter. We reported stable revenue and adjusted OEBDOT growth for the fourth consecutive quarter. Revenue performance was led by QVC UK and Japan, with mid and low single digits, respectively. Now looking at programming, total minutes viewed on our five channels were down 1% this quarter. Including streaming, total viewership was up 1%. Our streaming business is seeing strong momentum. While still relatively small compared to our traditional channels, revenue, total minutes viewed, and monthly active users all grew well over double digits in Q2.

Speaker Change: qubc international delivered another very solid quarter

Speaker Change: We reported stable revenue and adjusted OEBDOT growth for the fourth consecutive quarter.

David Rawlinson: Revenue performance was led by QVC UK and Japan, up mid and low single digits, respectively. Both countries saw sales growth in most categories, with the UK seeing particular strength in beauty, jewelry, accessories, and home, and Japan seeing strength in jewelry, electronics, and apparel. QVC's international adjusted OIBDA growth was driven by strong product margin expansion and cost control, partially offset by fulfillment pressure from higher volume, wages, and carrier rates. At Cornerstone, revenue declined 14% due to low demand from the continued housing pressures I mentioned earlier. Despite this, we generated gross margin expansion from lower supply chain costs. The gross margin gain was more than offset by the deleveraging of SG&A costs, resulting in a $6 million adjusted OIBDA decline. Now, looking at programming, total minutes viewed on our five channels were down 1% this quarter. Including streaming, total viewership was up 1%.

Speaker Change: Revenue performance was led by QVC UK and Japan of mid and low single digits respectively.

Bill Wofford: Both countries saw sales growth in most categories with the UK seeing particular strength in beauty, jewelry, accessories, and home, and Japan seeing strength in jewelry, electronics, and apparel.

Bill Wofford: QVC's international adjusted OIDA growth was driven by strong product margin expansion and cost control, partially offset by fulfillment pressure from higher volume, wages, and carrier rates.

David Rollinson: At Cornerstone, revenue declined 14% due to low demand from the continued housing pressures I mentioned earlier. Despite this, we generated gross margin expansion from lower supply chain costs. The gross margin gain was more than offset by the leveraging of SG&A costs, resulting in a $6 million adjusted orbit out decline.

Speaker Change: at cornerstone revenue declinine fourteen percent due to lowad demand from the continued housing pressures i mentioned earlier despite this we generated gross margin expansion from lower supply chain costs

David Rawlinson: Despite this, we generated gross margin expansion from lower supply chain costs. However, the gross margin gain was more than offset by the deleveraging of SG&A costs, resulting in a $6 million adjusted OEBDOT decline. Now looking at programming, total minutes viewed on our five channels, we're down 1% this quarter. However, including streaming, total viewership was up 1%. Our streaming business is seeing strong momentum. While still relatively small compared to our traditional channels, revenue, total minutes viewed, and monthly active users all grew well over double digits in Q2.

Bill Wofford: The gross margin gain was more than offset by the deleveraging of SG&A costs resulting in a $6 million adjusted OEBDOT decline.

David Rollinson: Now looking at programming, total min is viewed on our five channels were down 1% this quarter. Including streaming total viewership was up 1%. Our streaming business is seeing strong momentum, while still relatively small compared to our traditional channels. Revenue, total min is viewed, and monthly active users all grew well over double digits in Q2.

Bill Wofford: Now, looking at programming, total minutes viewed on our five channels were down 1% this quarter.

David Rawlinson: Our streaming business is seeing strong momentum. While still relatively small compared to our traditional channels, revenue, total minutes viewed, and monthly active users all grew well over double digits in Q2. On our last call, we announced that New York Times bestselling author, activist, actor, and writer, Busy Philipps, was returning to late night to host a talk show exclusively on QVC+, our streaming platform. The show demonstrates how celebrity content attracts viewers. May and June, 63% of the show's viewers were new customers. According to a survey on social media, the show reached viewers across generations, with more than 80% of viewers 49 or younger. Looking into the second half of 2024, we anticipate consumers will remain selective in their spending, given continued macro challenges, and with the election and the Olympics competing for airtime.

Bill Wofford: including streaming, total viewership was up 1%.

Bill Wofford: Our streaming business is seeing strong momentum. While still relatively small compared to our traditional channels, revenue, total minutes viewed, and monthly active users all grew well over double digits in Q2.

David Rollinson: On our last call, we announced that New York Times' death-selling author, activist, actor, and writer, Dizzy Phillips, was returning to late-night to host the talk show exclusively on QVC Plus, our streaming platform. The show demonstrates how celebrity content attracts viewers, and May and June, 63 percent of the show's viewers were new customers. According to a survey on social media, the show reached viewers across generations, with more than 80 percent of viewers, 49 are younger.

David Rawlinson: On our last call, we announced that New York Times best-selling author, activist, actor, and writer, Dizzy Phillips, was returning to late night to host a talk show exclusively on QVC Plus, our streaming platform. The show demonstrates how celebrity content attracts viewers. In May and June, 63% of the show's viewers were new customers. According to a survey on social media, the show reached viewers across generations, with more than 80% of viewers 49 or younger.

Unnamed Speaker: On our last call, we announced that New York Times best-selling author, activist, actor, and writer, Dizzy Phillips, was returning to late night to host a talk show exclusively on QVC Plus, our streaming platform. The show demonstrates how celebrity content attracts viewers, and in May and June, 63% of the show's viewers were new customers. According to a survey on social media, the show reached viewers across generations with more than 80% of viewers 49 or younger. Looking into the second half of 2024, we anticipate consumers will remain selective in their spending, due to continued macro challenges and with the election and the Olympics competing for airtime.

Speaker Change: On our last call, we announced that New York Times bestselling author, activist, actor, and writer.

Dizzy Phillips: Dizzy Phillips was returning to late night to host a talk show exclusively on QVC Plus, our streaming platform.

Dizzy Phillips: The show demonstrates how celebrity content attracts viewers. In May and June , 63% of the show's viewers were new customers.

Bill Wofford: According to a survey on social media, the show reached viewers across generations, with more than 80% of viewers 49 or younger.

David Rollinson: Looking into the second half of 2024, we anticipate consumers will remain selective in their spending, given continued macrochallenges, and with the election and the Olympics competing for their time. During this time, we plan to continue disciplined cost management and expect to realize further margin expansion from our Athens initiatives.

David Rawlinson: Looking into the second half of 2024, we anticipate consumers will remain selective in their spending, due to continued macro challenges and with the election and the Olympics competing for airtime. During this time, we plan to continue disciplined cost management and expect to realize further margin expansion from our Athens Initiative. We're also pleased to announce that we have hired Mara Serhal as the new Chief Merchandise Officer of QVCUS. She replaces Stacey Bowe, who was appointed President of HSN in February.

Speaker Change: Looking into the second half of 2024, we anticipate consumers will remain selective in their spending, giving continued macro challenges, and with the election and the Olympics competing for airtime.

Unnamed Speaker: During this time, we plan to continue disciplined cost management and expect to realize further margin expansion from our Athens Initiative. We're also pleased to announce that we have hired Mara Serhal as the new Chief Merchandise Officer of QVCUS. Mara replaces Stacey Bowe, who was appointed President of HSN in February.

David Rawlinson: During this time, we plan to continue disciplined cost management and expect to realize further margin expansion from our Athens initiatives. We're also pleased to announce that we have hired Mara Sirhal as the new Chief Merchandising Officer of QVC U.S. Mara replaces Stacy Bowe, who was appointed President of HSN in February. She joined QVC in late July and brings with her more than 20 years of experience in merchandising, product and brand development, and sourcing. Most recently, she was Chief Merchant and Brand Officer for Saks OFF 5TH. Prior to that, she held leadership roles with Bed Bath & Beyond and Macy's. We're excited to welcome her to this key leadership role in our largest business. In conclusion, we delivered another solid quarter of earnings, sustaining revenue consistent with the overall discretionary market, generating gross margin expansion, and Adjusted OIBDA growth.

Speaker Change: During this time, we plan to continue discipline cost management and expect to realize further margin expansion from our Athens initiatives.

David Rollinson: We're also pleased to announce that we have hired Mara Thurhall as the new Chief Merchandise Officer of QVC-US. Mara replaces Stacey Bow, who was appointed president of HSN in February. She joined QVC in late July and brings with her more than 20 years of experience in merchandising, product and brand developing, and sourcing. Most recently, she was Chief Merchandise and Brand Officer for Stacks Off-Dit. Prior to that, she helped leadership roles with Bed Bath and Beyond in Macy's. We're excited to welcome her to this key leadership role in our another solid quarter of earnings, sustaining revenue consistent with the overall discretionary market, generating gross margin expansion, and adjusted orthodox growth.

Marris Thhall: we're also pleased to announce that we have hired marris thhall as the new chief merchandise officer of qvc us

Unnamed Speaker: mar replacedes stacybow who was appointed president of hs in at february

David Rawlinson: She joined QVC in late July and brings with her more than 20 years of experience in merchandising, product and brand development, and sourcing. Most recently, she was Chief Merchant and Brand Officer for Saks Off Debt. Prior to that, she held leadership roles with Bed Bath & Beyond and Mason.

Speaker Change: She joined QVC in late July and brings with her more than 20 years of experience in merchandising, product and brand developing and sourcing.

Marris Thhall: Most recently, she was Chief Merchant and Brand Officer for Saks Off Debt. Prior to that, she held leadership roles with Bed Bath & Beyond and Macy's.

Bill Wofford: In conclusion, we delivered another solid quarter of earnings, sustaining revenue consistent with the overall discretionary market, generating gross margin expansion, and adjusted OIDA DA growth. We remain steadfastly focused on executing Project Athens, and we are positioning our business for growth and demand generation in future years. We look forward to providing more information on future calls and at Investor Day. Now, I'll turn the call over to Bill to discuss the financial results of each of our businesses in more detail.

Unnamed Speaker: We're excited to welcome her to this key leadership role in our largest business. And we delivered another solid quarter of earnings. Now I'll turn the call over to Bill to discuss the financial results of each of our businesses in more detail. Unless otherwise noted, my comments compare financial performance for the three months ended June 30, 2024, to the same period in 2023, starting with QX. Revenue declined 4% due to lower unit volume and shipping and handling revenue, partially offset by higher average selling prices. From a category perspective, QXH experienced growth in jewelry, which was offset by declines mainly in beauty, apparel, and accessories.

Speaker Change: We're excited to welcome her to this key leadership role in our largest business.

Bill: In conclusion,

Speaker Change: We delivered another solid quarter of earnings.

Speaker Change: Sustaining revenue consistent with the overall discretionary market. Generating gross margin expansion.

David Rollinson: We remain steadfastly focused on executing project Athens, and we are positioning our business for growth and demand generation in future years.

David Rawlinson: We remain steadfastly focused on executing Project Athens, and we are positioning our business for growth and demand generation in future years. We look forward to providing more information on future calls and at Investor Day. Now, I'll turn the call over to Bill to discuss the financial results of each of our businesses in more detail.

Bill: and Adjusted Orbital Growth.

Marris Thhall: We remain steadfastly focused on executing Project Athens, and we are positioning our business for growth and demand generation in future years.

David Rollinson: We look forward to providing more information on future calls and at Investor Day.

Bill Wofford: we look forward to providing more information on future calls and that investor daynow i'll turn the call over to bill to discuss the financial results of each of our businesses and more detail

Bill Wofford: Now, I'll turn the call over to Bill to discuss the financial results of each of our businesses in more detail. Thank you, David, and good morning, everyone. Unless otherwise noted, my comments compare financial performance for the three months ended June 30th, 2024, to the same period in 2023, starting with QXH. Revenue declined 4% due to lower-unit volume and shipping and handling revenue, partially offset by higher-ever selling price. From a category perspective, QXH experienced growth in jewelry, which was offset by the clients mainly in beauty, apparel, and accessories. Home revenue decreased 1% due to soft demand for gardening and food.

Bill: Gross Margin Expanded 160 Basis Points Driven by Favorable Product Margins and Fulfillment Expanded, Product margins increased 105 basis points due to higher initial margins from Project Athens initiatives, partially offset by lower shipping and handling revenues. Fulfillment expenses improved 60 basis points due to efficiencies from Athens and average selling price leverage. SG&A was unfavorable by approximately 55 basis points, of which 105 were from higher marketing expenses partially offset by lower administrative expenses. Administrative expenses declined as we compared Project Athens-related costs in the prior year period.

Claire Adams: Thank you, David. Good morning, everyone. Unless otherwise noted, my comments compare financial performance for the three months ending 30 June 2024, to the same period in 2023. Starting with QXH, revenue declined 4% due to lower unit volume and shipping and handling revenue, partially offset by higher average selling price. From a category perspective, QXH experienced growth in jewelry, which was offset by declines mainly in beauty, apparel, and accessories. Home revenue decreased 1% due to soft demand for gardening and food. Apparel declined 4% due to soft demand for clearance and spring apparel, partially offset by gains in certain brands related to QVC's Age of Possibility as well as Diane Gilman's 30th anniversary celebration at HSN. Beauty declined 9%, reflecting lower demand for bath and body. Accessories declined 5% due to lower demand for loungewear and handbags.

Bill Wafford: Thank you, David. Good morning, everyone. Unless otherwise noted, my comments compare financial performance for the three months ending 30 June 2024, to the same period in 2023. Starting with QXH, revenue declined 4% due to lower unit volume and shipping and handling revenue, partially offset by higher average selling price. From a category perspective, QXH experienced growth in jewelry, which was offset by declines mainly in beauty, apparel, and accessories. Home revenue decreased 1% due to soft demand for gardening and food. Apparel declined 4% due to soft demand for clearance and spring apparel, partially offset by gains in certain brands related to QVC's Age of Possibility as well as Diane Gilman's 30th anniversary celebration at HSN. Beauty declined 9%, reflecting lower demand for bath and body. Accessories declined 5% due to lower demand for loungewear and handbags.

Bill Wofford: Thank you, David. And good morning, everyone.

Bill Wofford: Unless otherwise noted, my comments compare financial performance for the three months ended June 30, 2024, to the same period in 2023, starting with QX. Revenue declined 4% due to lower unit volume in shipping and handling revenue, partially offset by higher average selling prices. From a category perspective, QXH experienced growth in jewelry, which was offset by declines mainly in beauty, apparel, and accessories. Home revenue decreased 1% due to soft demand for gardening and food.

Bill: Thank you, David, and good morning, everyone. Unless otherwise noted, my comments compare financial performance for the three months ended June 30, 2024, to the same period in 2023.

Speaker Change: starting with q x h

Bill: Revenue declined four percent due to lower unit volume and shipping and handling revenue partially offset by higher average selling price.

Speaker Change: From a category perspective, QXH experienced growth in jewelry, which was offset by declines mainly in beauty, apparel, and accessories.

Bill: Home revenue decreased 1% due to soft demand for gardening and food.

Bill Wofford: Apparel declined 4% due to soft demand for clearance and spring apparel, partially offset by gains in certain brands related to QVC's Age of Possibility as well as Diane Gilman's 30th anniversary celebration at HSN. Beauty declined 9%, reflecting lower demand for bathroom body. Accessories declined 5% due to lower demand for loungewear and handbags. Electronics declined 11% due to softness in computers and smart homes. Jewelry grew 12%, reflecting successful fire-light, lab-grown diamonds, and a today's special value for ultra-fine silver. Adjusted oivina margin increased 110 basis points driven by continued gross margin gains. Gross margin expanded 160 basis points driven by favorable product margins and fulfillment expense.

Bill Wofford: Apparel declined 4% due to soft demand for clearance in spring apparel, partially offset by gains in certain brands related to QVC's Age of Possibility, as well as Diane Gilman's 30th anniversary celebration at HSN. Beauty declined 9%, reflecting lower demand for bath and body. Accessories declined 5% due to lower demand for loungewear and handbags. Electronics declined 11% due to softness in computers and smart homes.

Speaker Change: Apparel declined 4% due to soft demand for clearance in spring apparel, partially offset by gains in certain brands related to QVC's Age of Possibility, as well as Diane Gilman's 30th anniversary celebration at HSN.

Speaker Change: Beauty declined 9% reflecting lower demand for bath and body. Accessories declined 5% due to lower demand for loungewear and handbags. Electronics declined 11% due to softness in computers and smart home.

Claire Adams: Electronics declined 11% due to softness in computers and smart home. Jewelry grew 12%, reflecting successful Fire Light lab-grown diamonds and, at today's special value, full UltraFine silver. Adjusted OIBDA margin increased 110 basis points, driven by continued gross margin gains. Gross margin expanded 160 basis points, driven by favorable product margins and fulfillment expense. Product margins increased 105 basis points due to higher initial margins from Project Athens initiatives, partially offset by lower shipping and handling revenue. Fulfillment expenses improved 60 basis points due to efficiencies from Athens and average selling price leverage. SG&A was unfavorable approximately 55 basis points, of which 105 were from higher marketing expenses, partially offset by lower administrative costs. Marketing expenses increased due to the launch of QVC's Age of Possibility campaign in April and associated brand marketing. Administrative expenses declined as we comped Project Athens-related costs in the prior year period.

Bill Wafford: Electronics declined 11% due to softness in computers and smart home. Jewelry grew 12%, reflecting successful Fire Light lab-grown diamonds and, at today's special value, full UltraFine silver. Adjusted OIBDA margin increased 110 basis points, driven by continued gross margin gains. Gross margin expanded 160 basis points, driven by favorable product margins and fulfillment expense. Product margins increased 105 basis points due to higher initial margins from Project Athens initiatives, partially offset by lower shipping and handling revenue. Fulfillment expenses improved 60 basis points due to efficiencies from Athens and average selling price leverage. SG&A was unfavorable approximately 55 basis points, of which 105 were from higher marketing expenses, partially offset by lower administrative costs. Marketing expenses increased due to the launch of QVC's Age of Possibility campaign in April and associated brand marketing. Administrative expenses declined as we comped Project Athens-related costs in the prior year period.

Bill Wofford: Jewelry grew 12%, reflecting successful firelight lab-grown diamonds and at today's special value for ultra-fine silver. Adjusted EBITDA margin increased 110 basis points driven by continued gross margin gains. Gross Margin Expanded 160 Basis Points Driven by Favorable Product Margins and Fulfillment Expanded. Product margins increased 105 basis points due to higher initial margins from Project Athens initiatives, partially offset by lower shipping and handling revenues. Fulfillment expenses improved 60 basis points due to efficiencies from Athens and average selling price leverage.

Speaker Change: Jewelry grew 12% reflecting successful firelight lab-grown diamonds and at today's special value for ultra-fine silver.

Bill: Adjusted EBITDA margin increased 110 basis points driven by continued gross margin gains.

Bill: Gross Margin Expanded 160 Basis Points Driven by Favorable Product Margins and Fulfillment Expense

Bill Wofford: Product margins increased 105 basis points due to higher initial margins from project Athens initiatives, partially offset by lower shipping and handling revenue. Fulfillment expenses improved 60 basis points due to efficiencies from Athens and average selling price leverage. SGNA was unfavorable, approximately 55 basis points, of which 105 were from higher marketing expenses, partially offset by lower administrative costs. Marketing expenses increased due to the launch of KVC's Age of Possibility campaign in April and associated brand marketing. Administrative expenses declined as we comped project Athens-related costs in the prior year period. We continue to be displaying in our cost management to sustain adjusted orbital margin gains while investing in future growth.

Bill: Product margins increased 105 basis points due to higher initial margins from Project Athens initiatives, partially offset by lower shipping and handling revenue.

Bill: fulfillment expenses improve sixty basis points due to efficiencies from athens and average selling price leverage

Bill Wofford: SG&A was unfavorable by approximately 55 basis points, of which 105 were from higher marketing expenses partially offset by lower administrative expenses. Marketing expenses increased due to the launch of QVC's Age of Possibility campaign in April and associated brand marketing. Administrative expenses declined as we incurred Project Athens-related costs in the prior year period. We continue to be disciplined in our cost management to sustain adjusted orbital margin gains while investing in future growth. Sales to leverage has been impacting the business in a challenged macro backdrop. We believe the marketing investments we are making are important in driving the business for the long term. Moving to QVC International, my comments focus on the constant currency reserve.

Bill: SG&A was unfavorable approximately 55 basis points of which 105 were from higher marketing expenses partially offset by lower administrative costs.

Bill: Marketing expenses increased due to the launch of QVC's Age of Possibility campaign in April and associated brand marketing.

Bill: Administrative expenses declined as we comped Project Athens-related costs in the prior year period.

Claire Adams: We continue to be disciplined in our cost management to sustain adjusted OIBDA margin gains while investing in future growth. Sales deleverage has been impacting the business in a challenged macro backdrop. We believe the marketing investments we are making are important in driving the business for the long term. Moving to QVC International, my comments focus on constant currency results. Revenue was flat, reflecting a 4% increase in units shipped, offset by a 3% lower average selling price, and unfavorable returns. QVC UK and Japan latter performance up mid and low single digits, respectively. Germany declined low to mid single digits. From a category perspective, QVC International experienced constant currency growth in jewelry, beauty, and electronics, with a decline in home. Adjusted OIBDA increased 8%, and adjusted OIBDA margin expanded 75 basis points.

Bill Wafford: We continue to be disciplined in our cost management to sustain adjusted OIBDA margin gains while investing in future growth. Sales deleverage has been impacting the business in a challenged macro backdrop. We believe the marketing investments we are making are important in driving the business for the long term. Moving to QVC International, my comments focus on constant currency results. Revenue was flat, reflecting a 4% increase in units shipped, offset by a 3% lower average selling price, and unfavorable returns. QVC UK and Japan latter performance up mid and low single digits, respectively. Germany declined low to mid single digits. From a category perspective, QVC International experienced constant currency growth in jewelry, beauty, and electronics, with a decline in home. Adjusted OIBDA increased 8%, and adjusted OIBDA margin expanded 75 basis points.

Bill: We continue to be disciplined in our cost management to sustain adjusted orbital margin gains while investing in future growth. Revenue was flat, reflecting a 4% increase in unit shipped, offset by a 3% lower average selling price and unfavorable return. QVC UK and Japan letter performance was at mid and low single digits, respectively. Moving to Cornerstone.

Bill: We continue to be disciplined in our cost management to sustain adjusted orbital margin gains while investing in future growth.

Bill Wofford: Sales delivery has been impacting the business in a challenged macro backdrop. We believe the marketing investments we are making are important in driving the business for the long term.

Speaker Change: sales deleverage has been impacting the business in a challenggeed macro backdrop we believe the marketing investments we are making are important in driving the business for the long term

Bill Wofford: Moving to KVC International. My comments focus on constant currency results. Revenue was flat, reflecting a 4% increase in unit shift, offset by a 3% lower average selling price, and unfavorable returns. KVC, UK, and Japan, letter of performance, mid and low single digits respectively. Germany declined low to mid single digits. From a category perspective, KVC International experienced constant currency growth in jewelry, beauty, and electronics, with a decline in home. Adjusted orbital increased 8% and adjusted orbital margin expanded 75 basis points. Gross margin increased 10 basis points driven by increased initial margins due to a mixed shift to higher margin products and favorable vendor negotiations.

Speaker Change: moving to tvc or national my comments focus on constant currency results

Bill Wofford: Revenue was flat, reflecting a 4% increase in units shipped, offset by a 3% lower average selling price and unfavorable return. QVC UK and Japan reported letter performance at mid and low single digits, respectively. Germany declined low to mid. From a category perspective, QVC International experienced constant currency growth in jewelry, beauty, and electronics, with a decline in health. Adjusted OEBDA increased 8%, and Adjusted OEBDA Margin expanded 75%. Gross margin increased 10 basis points driven by increased initial margins due to a mixed shift to higher-margin products and favorable vendor negotiations.

Bill: revenue was flat reflecting a four percent increase in unit shift offset by a three percent lower average selling price and unfavorable returns

Bill: QVC UK and Japan letter performance at mid and low single digits respectively.

Bill: germany declined low miding digits

Bill: From a category perspective, QVC International experienced constant currency growth in jewelry, beauty, and electronics, with a decline in home.

Bill: adjusted orbitda increased eight percent and adjust eybit to margin expanded seventy-five basis points

Claire Adams: Gross margin increased 10 basis points, driven by increased initial margins due to a mix shift to higher margin products and favorable vendor negotiations. Product margin gains were partially offset by higher fulfillment costs, reflecting higher unit volume, and increased wages and freight rates, reflecting inflationary pressures. SG&A was favorable primarily due to lower marketing and outside service costs. Moving to Cornerstone, revenue declined 14% as we experienced soft demand across our home brands due to challenges in the macro environment. Gross margin expanded 320 basis points due to favorable supply chain costs. These gains were more than offset by deleveraging of SG&A expenses, resulting in adjusted OIBDA decreasing $6 million compared to last year. Turning to cash flow and the balance sheet, in the first half of 2024, free cash flow was a source of $164 million versus a source of $6 million last year, excluding insurance proceeds.

Bill Wafford: Gross margin increased 10 basis points, driven by increased initial margins due to a mix shift to higher margin products and favorable vendor negotiations. Product margin gains were partially offset by higher fulfillment costs, reflecting higher unit volume, and increased wages and freight rates, reflecting inflationary pressures. SG&A was favorable primarily due to lower marketing and outside service costs. Moving to Cornerstone, revenue declined 14% as we experienced soft demand across our home brands due to challenges in the macro environment. Gross margin expanded 320 basis points due to favorable supply chain costs. These gains were more than offset by deleveraging of SG&A expenses, resulting in adjusted OIBDA decreasing $6 million compared to last year. Turning to cash flow and the balance sheet, in the first half of 2024, free cash flow was a source of $164 million versus a source of $6 million last year, excluding insurance proceeds.

Speaker Change: gross margin increased ten basis points dven by increasedinitial margins due to a mix shift to higher margin products and favorable of ender negotiations

Bill Wofford: Product margin gains were partially offset by higher fulfillment costs, reflecting higher unit volume, and increased wages and trade rates, reflecting inflationary pressures. SG&A was favorable primarily due to lower marketing and outside service costs.

Bill Wofford: Product margin gains were partially offset by higher fulfillment costs, reflecting higher unit volume, and increased wages and freight rates, reflecting inflationary pressure. SG&A was favorable primarily due to lower marketing and outside services. Moving to Cornerstone, revenue declined 14% as we experienced soft demand across our home brands due to challenges in the macro environment.

Bill: Product margin gains were partially offset by higher fulfillment costs reflecting higher unit volume and increased wages and freight rates reflecting inflationary pressures.

Bill: SG&A was favorable primarily due to lower marketing and outside service costs.

Bill Wofford: Moving to Cornerstone. Revenue declined 14% as we experienced soft demand across our home brands due to challenges in the macro environment. Gross margin expanded 320 basis points due to favorable supply chain costs. These gains were more than offset by leveraging a SG&A expenses, resulting in that adjusted orbit at decreasing 6 million compared to last year.

Unnamed Speaker: Revenue declined 14% as we experienced soft demand across our home brands due to challenges in the macro environment. However, gross margin expanded 320 basis points due to favorable supply chain costs. These gains were more than offset by deleveraging of SG&A expenses, resulting in adjusted OIBD decreasing $6 million compared to last year on renewals of our TV distribution contracts and $94 million on capital expenditures. Finally, on an administrative note, on June 10th, we received another notice from NASDAQ that QRTEA's closing bid price had fallen below $1 per share for 30 consecutive business days.

Unnamed Speaker: Moving to Cornerstone.

Unnamed Speaker: Revenue declined 14% as we experienced soft demand across our home brands due to challenges in the macro environment.

Bill Wofford: Gross Margin expanded 320 basis points due to favorable supply chain costs. However, these gains were more than offset by deleveraging of SG&A..., resulting in an adjusted OIB at a decreasing $6 million compared to last year. Turning the Cash Flow into Balance. In the first half of 2024, pre-cash flow was a source of $164 million versus a source of $6 million last year, excluding insurance proceeds. In the second quarter of 2023, we received $280 million in insurance proceeds related to the Rocky Mountains.

Unnamed Speaker: gross margin expanded three hundredand twenty basis points due to favorable supply chain costs these gains are more than offset by deleveraging of sgna expenses resulting in adjusted obit a decreasing six million compared to last year

Bill Wofford: Turning the cash flow on the balance sheet. In the first half of 2024, pre-cash flow was a source of $164 million versus a source of $6 million last year, excluding insurance proceeds. In the second quarter of 2023, we received $280 million in insurance proceeds related to the Rocky Mount fire. The increase in cash flow net of insurance proceeds was primarily due to lower payments for TV distribution rights this year. In the first six months, we spent 13 million on TV renewals on renewals of our TV distribution contracts and 94 million on capital expenditure.

Speaker Change: turning to cashflow in the balance she

Unnamed Speaker: In the first half of 2024, pre-cash flow was a source of $164 million versus a source of $6 million last year, excluding insurance proceeds.

Claire Adams: In Q2 2023, we received $280 million in insurance proceeds related to the Rocky Mountain fire. The increase in cash flow net of insurance proceeds was primarily due to lower payments for TV distribution rights this year. In the first six months, we spent $13 million on renewals of our TV distribution contracts, and $94 million on capital expenditures. Looking at our debt profile, as of 30 June 2024, net debt was $4.7 billion, down $179 million from 31 March 2024. We reduced the revolver balance by $70 million in Q2 and had $1.2 billion drawn on the QVC revolver, with $1.9 billion in available capacity.

Bill Wafford: In Q2 2023, we received $280 million in insurance proceeds related to the Rocky Mountain fire. The increase in cash flow net of insurance proceeds was primarily due to lower payments for TV distribution rights this year. In the first six months, we spent $13 million on renewals of our TV distribution contracts, and $94 million on capital expenditures. Looking at our debt profile, as of 30 June 2024, net debt was $4.7 billion, down $179 million from 31 March 2024. We reduced the revolver balance by $70 million in Q2 and had $1.2 billion drawn on the QVC revolver, with $1.9 billion in available capacity.

Unnamed Speaker: In the second quarter of 2023, we received $280 million in insurance proceeds related to the Rocky Mountain Fire.

Bill Wofford: The increase in cash flow net of insurance proceeds was primarily due to lower payments for TV distribution rights this year. In the first six months, we spent $13 million on TV renewals, on renewals of our TV distribution contracts, and $94 million on capital expenditures. Looking at our debt profile, as of June 30, 2024, net debt was $4.7 billion, down $179 million from March 31. We reduced the revolver balance by $70 million in the second quarter and had $1.2 billion drawn on the QVC revolver with $1.9 billion in available capacity.

Unnamed Speaker: The increase in cash flow net of insurance proceeds was primarily due to lower payments for TV distribution rights this year. In the first six months, we spent $13 million on TV renewals, on renewals of our TV distribution contracts, and $94 million on capital expenditures.

Speaker Change: looking at our debt profile as of june thirtieth two thousand and twenty-four net bt was four point seven billion dollars down one hundred and seventy-nine million from march thirty first

Speaker Change: We reduced the revolver balance by $70 million in the second quarter and had $1.2 billion drawn on the QVC revolver, with $1.9 billion in available capacity.

Bill Wofford: Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail QVC leverage ratio increased from March 31st primarily due to certain addbacks no longer impacting the calculation. Finally, on an administrative note, on June 10th, we received another notice from NASDAQ that QRTEA's closing bid price had fallen below $1 per share for 30 consecutive business days. As in the past, this notice begins a period of 180 calendar days to regain compliance. Which means the stock needs to have a closing bid of $1 or more for 10 consecutive business trading days for continued listing on NASDAQ.

Bill Wofford: In terms of cash balances, Curate Retail had total cash of $1.2 billion, of which $315 million was at QVC Inc., $116 million was at Cornerstone, $470 million was at Liberty Inactive LLC, and $309 million was at Curate Retail Inc. Our leverage ratio as of Q2 as defined by the QVC Revolving Credit Facility was 3.1 times, compared to our maximum covenant threshold of 4.5. Please note that Covenant Oivida includes the adjusted Oivida of QVC Ink and Cornerstone and a portion of projected cost savings.

Claire Adams: In terms of cash balances, Qurate Retail had total cash of $1.2 billion, of which $315 million was at QVC, Inc., $116 million was at Cornerstone, $470 million was at Liberty Interactive, LLC, and $309 million was at Qurate Retail, Inc. Our leverage ratio, as of Q2, as defined by the QVC revolving credit facility, was 3.1 times, compared to our maximum covenant threshold of 4.5 times. Please note that covenant OIBDA includes the adjusted OIBDA of QVC, Inc. and Cornerstone, and a portion of projected cost savings. QVC's leverage ratio increased from 31 March, primarily due to certain add-backs no longer impacting the calculation. Finally, on an administrative note, on 10 June, we received another notice from NASDAQ that QRTEA's closing bid price had fallen below $1 per share for 30 consecutive business days.

Bill Wafford: In terms of cash balances, Qurate Retail had total cash of $1.2 billion, of which $315 million was at QVC, Inc., $116 million was at Cornerstone, $470 million was at Liberty Interactive, LLC, and $309 million was at Qurate Retail, Inc. Our leverage ratio, as of Q2, as defined by the QVC revolving credit facility, was 3.1 times, compared to our maximum covenant threshold of 4.5 times. Please note that covenant OIBDA includes the adjusted OIBDA of QVC, Inc. and Cornerstone, and a portion of projected cost savings. QVC's leverage ratio increased from 31 March, primarily due to certain add-backs no longer impacting the calculation. Finally, on an administrative note, on 10 June, we received another notice from NASDAQ that QRTEA's closing bid price had fallen below $1 per share for 30 consecutive business days.

Unnamed Speaker: In terms of cash balances, Curate Retail had total cash of $1.2 billion, of which $315 million was at QVC Inc., $116 million was at Cornerstone, $470 million was at Liberty Inactive LLC, and $309 million was at Curate Retail Inc.

Unnamed Speaker: Our leverage ratio as of Q2, as defined by the QVC Revolving Credit Facility, was 3.1 times compared to our maximum covenant threshold of 4.5 times.

Speaker Change: Please note that Covenant Oivida includes the adjusted Oivida of QVC ink and cornerstone and a portion of projected cost savings.

Bill Wofford: QVC's leverage ratio increased from March 31st primarily due to certain adbacks no longer impacting the capital. Finally, on an administrative note, on June 10th, we received another notice from NASDAQ that QRTEA's closing bid price had fallen below $1 per share for 30 consecutive business days. As in the past, this notice begins a period of 180 calendar days to regain compliance, which means the stock needs to have a closing bid of $1 or more for 10 consecutive business trading days for continued listing on NASDAQ.

Speaker Change: qvc leverage ratio increased from march thirty-first primarily due to certain adbacks no longer impacting the calculation

Unnamed Speaker: Finally, on an administrative note, on June 10th we received another notice from NASDAQ that QRTEA's closing bid price had fallen below $1 per share for 30 consecutive business days.

Claire Adams: As in the past, this notice begins a period of 180 calendar days to regain compliance, which means the stock needs to have a closing bid of $1 or more for 10 consecutive business trading days for continued listing on NASDAQ. While there may be an additional grace period we could be eligible for, we remain focused on sustaining improved execution and financial performance. Q2 was the fifth consecutive quarter of gross margin expansion and the fourth consecutive quarter of adjusted OIBDA growth. 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. Now, I'll turn the call over to Greg.

Bill Wafford: As in the past, this notice begins a period of 180 calendar days to regain compliance, which means the stock needs to have a closing bid of $1 or more for 10 consecutive business trading days for continued listing on NASDAQ. While there may be an additional grace period we could be eligible for, we remain focused on sustaining improved execution and financial performance. Q2 was the fifth consecutive quarter of gross margin expansion and the fourth consecutive quarter of adjusted OIBDA growth. 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. Now, I'll turn the call over to Greg.

Unnamed Speaker: As in the past, this notice begins a period of 180 calendar days to regain compliance, which means the stock needs to have a closing bid of $1 or more for 10 consecutive business trading days for continued listing on NASDAQ.

Bill Wofford: While there may be an additional grace period, we could be eligible for. We remain focused on sustaining improved execution and financial performance. Q2 was the 5th consecutive quarter of gross margin expansion and the 4th consecutive quarter of adjusted over the growth. 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.

Bill Wofford: While there may be an additional grace period we could be eligible for, we remain focused on sustaining improved execution and financial performance. Q2 was the fifth consecutive quarter of Gross Margin Expansion and the fourth consecutive quarter of Adjusted Oeuvre de Grosse. 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. Now, I'll turn the call over to Greg.

Unnamed Speaker: while there may be an additional grace period we could be eligible for we remain focused on sustaining improved execution and financial performance

Unnamed Speaker: Q2 was the fifth consecutive quarter of gross margin expansion and the fourth consecutive quarter of adjusted oil growth.

Unnamed Speaker: 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.

Greg: Now I'll turn the call over to Greg. Thanks, Bill. As you heard, there's another solid quarter in a difficult macro environment. Great to see continued gross margin expansion and adjusted over the growth. QRTEA is focused on execution and making progress on new and creative initiatives like streaming in the age of possibility. They're also paying close attention to the balance sheet. You heard about reducing the revolver balance by 70 million adjusted order improvement and net debt paydown improving leverage. And we will continue to assess incremental opportunities to improve the balance sheet.

David Rawlinson: Thanks, Bill. As you just heard, it was another solid quarter in a difficult macro environment. Great to see continued gross margin expansion and Adjusted OIBDA growth. The Qurate team is focused on execution and making progress on new and creative initiatives like streaming and the Age of Possibility. We're also paying close attention to the balance sheet. You heard about reducing the revolver balance by $70 million, Adjusted OIBDA improvement, and net debt paydown improving leverage. We will continue to assess incremental opportunities to improve the balance sheet. Our annual Investor Day will be Thursday, 14 November, in New York. Please save the date. Additional details will be provided soon, and we hope to see many of you there. With that, operator, we'll open the line for questions.

Greg Maffei: Thanks, Bill. As you just heard, it was another solid quarter in a difficult macro environment. Great to see continued gross margin expansion and Adjusted OIBDA growth. The Qurate team is focused on execution and making progress on new and creative initiatives like streaming and the Age of Possibility. We're also paying close attention to the balance sheet. You heard about reducing the revolver balance by $70 million, Adjusted OIBDA improvement, and net debt paydown improving leverage. We will continue to assess incremental opportunities to improve the balance sheet. Our annual Investor Day will be Thursday, 14 November, in New York. Please save the date. Additional details will be provided soon, and we hope to see many of you there. With that, operator, we'll open the line for questions.

greick: now i'll turn the call over to greick

Operator: There's another solid quarter in a difficult macro environment. Adjusted Orbit Improvement and Net Debt Paydown Improvement Leverage, If you would like to ask a question...

Greg Messiaen: 3. Another Solid Quarter in a Difficult Macro Environment Great to see continued gross margin expansion and adjusted for growth. The Security Team is focused on execution and making progress on new and creative initiatives like streaming in the age of possibility. They're also paying close attention to the balance sheet by reducing the revolver balance by $70 million. Adjusted Orbit Improvement and Debt Paydown Improvement Leverage, we will continue to assess incremental opportunities to improve the balance.

Speaker Change: Thanks, Bill.

Operator: As you just heard, there's another solid quarter in a difficult macro environment.

Operator: Great to see continued gross margin expansion and adjusted orbital growth.

Speaker Change: the curate team is focused on execution and making progress on new creative initiatives like streaming and the age of possibility

Operator: They're also paying close attention to the balance sheet.

Operator: we heard our uing the revolver balanced by seventy million adjusted order improvement in net debt paydown improving leverage and we will continue to assess incremental opportunities to improve the balance sheet

Greg: Our annual investor day will be Thursday, November 14th in New York. Please save the date; additional details we provided soon. And we hope to see many of you there, and with that, operator, we'll open the line for questions.

Greg Messiaen: Our Annual Investor Day will be Thursday, November 14th in New York. Please save the date. Additional details will be provided soon. We hope to see many of you there. And with that, operator, we'll open the line for questions. Thank you. Ladies and gentlemen, we will now be conducting a question and answer session. If you would like to ask a question...

Speaker Change: our annual investor day will be thursday of over ber fourteenth in new york please save the neight additional details we provided soon

Operator: and we hope to see many of you there. And with that, Operator, we'll open the line for questions.

Operator: Thank you.

Operator: Thank you. Ladies and gentlemen, we will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Ladies and gentlemen, we will wait for a moment while the question queue pause. The first question comes from Karru Martinson with Jefferies. Please go ahead.

Operator: Ladies and gentlemen, we will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on a telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two. If you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Ladies and gentlemen, we will wait for a moment while the question you pose.

Operator: Ladies and gentlemen, we will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on the telephone keypad. 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 using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Ladies and gentlemen, we will wait for a moment while the question queue polls. The first question comes from Karu Maddison with Jeffrey's Company. Please go ahead.

Operator: thank you

Speaker Change: Ladies and gentlemen, we will now be conducting a question and answer session.

Operator: If you would like to ask a question, please press star 1 on the telephone keypad. A confirmation tone will indicate your line is in the question queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator: If you would like to ask a question, please press star 1 on a telephone keypad.

Operator: a confirmation tone will indicate your lineis in the question queue

Operator: you may press st two if you'd like to remove your question from the queue

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

Speaker Change: Ladies and gentlemen, we will wait for a moment while the question queue polls.

Operator: Thank you for watching!

Karu Manticin: The first question comes from Karu Manticin with Jeffree's company. Please go ahead. Good morning. I'm trying to get a little bit of an insight onto the consumer, certainly understanding that they're pulling back on discretionary, but then I look at your breakdown where jewelry sales were up 12%. What are you seeing on that trend for consumer spend? Is it getting worse? What's the health of the consumer that you guys see out there? Yeah, it's a good question. I'd say it's a hard read. I'd make a couple of observations. You have as much access to the macro data as I do, but obviously we're paying attention to variable interest rates, environments, and the effect that has on spending and employment rate, continued pressure on housing, obviously a lot of things going on in the external environment, elections around the world, the limbics, other things that could affect consumer sentiment.

Speaker Change: The first question comes from Karu Matterton with Jeffrey's Company. Please go ahead.

Karu Maddison: Good morning. I'm trying to get a little bit of an insight into the consumer. I mean, certainly, understanding that you know they're pulling back on discretionary spending, but then I look at your breakdown where jewelry sales were up, you know, 12%. What are you seeing kind of on that trend for consumer spend? Is it getting worse? And what's the health of the consumer that you guys see out there?

Bill Wafford: Good morning. Trying to get a little bit of an insight onto the consumer. I mean, certainly understanding that they're pulling back on discretionary, but then I look at your breakdown where jewelry sales were up 12%. What are you seeing kind of on that trend for consumer spend? Is it getting worse, and what's the health of the consumer that you guys see out there?

Karru Martinson: Good morning. Trying to get a little bit of an insight onto the consumer. I mean, certainly understanding that they're pulling back on discretionary, but then I look at your breakdown where jewelry sales were up 12%. What are you seeing kind of on that trend for consumer spend? Is it getting worse, and what's the health of the consumer that you guys see out there?

Speaker Change: good morning

Speaker Change: I'm trying to get a little bit of an insight onto the consumer, I mean, certainly understanding that they're pulling back on discretionary.

Speaker Change: But then I look at your breakdown where jewelry sales were up, you know, 12%. You know, what are you seeing kind of on that trend for consumer spend? Is it getting worse? And what's the health of the consumer that you guys see out there?

Questioner: And what's the health of the consumer that you guys see out there?

David Rawlinson: Yeah, it's a good question. I'd say it's a difficult read. I'd make a couple of observations. You have as much access to the macro data as I do, but obviously we're paying attention to... variable interest rates, environments, and the effect that has on spending, unemployment rates ticking up, continued pressure on housing, obviously a lot of things going on in the external environment, elections around the world, Olympics, other things that could affect consumer sentiment. I would say the biggest things we're seeing from our..., our consumer are continued. Being very choiceful, that's not quite the same as the pocketbook being closed, but it does mean that you have to really excite.

David Rawlinson: Yeah, it's a good question. I'd say it's a hard read. I'd make a couple of observations. You have as much access to the macro data as I do, but obviously, we're paying attention to variable interest rate environments and the effect that has on spending, an employment rate ticking up, continued pressure on housing. Obviously, a lot of things going on in the external environment, elections around the world, Olympics, other things that could affect consumer sentiment. I would say the biggest things we're seeing from our consumer are being very choiceful. That's not quite the same as the pocketbook being closed, but it does mean that you have to really excite. When our customer is excited, there's not necessarily massive price sensitivity. We're continuing to be able to sell at-volume, high-priced electric bikes at times, high-priced jewelry at times.

Speaker Change: Yeah, it's a good question. I'd say it's a hard read. I'd make a couple of observations.

Unnamed Speaker: You have as much access to the macro data as I do, but obviously, we're paying attention to... variable interest rates and the effect that has on spending, unemployment rates ticking up, continued pressure on housing, obviously a lot of things going on in the external environment, elections around the world, Olympics, other things that could affect consumer sentiment. I would say the biggest things we're seeing from our...

Unnamed Speaker: you have as much access to the macro data as i do but obviously we're paying attention to

Unnamed Speaker: variable interest rate environments and the effect that has on spending, unemployment rate ticking up, continued pressure on.

Unnamed Speaker: continued pressure on housing, obviously a lot of things going on in the external environment, elections around the world, Olympics, other things that could affect consumer sentiment. I would say the biggest things we're seeing from our

David Rollinson: I would say the biggest things we're seeing from our consumer are continued being very choiceful. That's not quite the same as the pocketbook being closed, but it does mean that you have to really excite. When our customer is excited, there's not necessarily massive price activity. We're continuing to be able to sell at volume, high price electric bikes at times, high price jewelry at times, but on the margin, the willingness to make purchases where she's not extremely excited by the value. I would say it's softer than it has been. I would say anything that feels more like a necessity continues to have reasonable demand.

Unnamed Speaker: Being very choiceful, that's not quite the same as the pocketbook being closed, but it does mean that you have to really excite. When a customer is excited, there's not necessarily massive price sensitivity. We're continuing to be able to sell at volume, high-priced electric bikes at times, high-priced jewelry at times, but on the margin, the willingness to make purchases where she's not extremely excited by the value is, I would say, softer than it has been.

Unnamed Speaker: our consumer our continued

Unnamed Speaker: being very choiceful. That's not quite the same as the pocketbook being closed.

Unnamed Speaker: but it does mean that you have to really excite when our customer is excited

David Rawlinson: When a customer is excited, there's not necessarily massive price sensitivity. We're continuing to be able to sell at volume high-priced electric bikes at times, high-priced jewelry at times, but on the margin, the willingness to make purchases where she's not extremely excited by the value, I would say is softer than it has been. I would say anything that feels more like a necessity continues to have reasonable demand. We also see a little bit of trading down and a little bit of value-seeking, but not extraordinary.

Unnamed Speaker: there's not necessarily massive price itivity we're continuing to be able to sell at volume high priced electric bikes at to high price

David Rawlinson: On the margin, the willingness to make purchases where she's not extremely excited by the value, I would say, is softer than it has been. I would say anything that feels more like a necessity continues to have reasonable demand. We also see a little bit of trading down and a little bit of value seeking. Not extraordinary. We haven't seen, for example, a big fleet of clearance, but we are seeing maybe a touch more price sensitivity at things around our average sell price. So I don't see, so far, the bottom falling out of the consumer. I do see a consumer that looks to be a bit under stress and who's being choosy when they're approaching their purchases. I would say I think that read across is consistent for us and what I'm largely seeing across discretionary retail.

Unnamed Speaker: jewelllry at h

Unnamed Speaker: and so but on the margin

Unnamed Speaker: the willingness to make purchases where she's not extremely excited by the value i would say a softer than it has been

Unnamed Speaker: I would say anything that feels more like a necessity continues to have reasonable demand. We also see a little bit of trading down and a little bit of value-seeking, but not extraordinary. We haven't seen, for example, a big fleet of clearance, but we are seeing maybe a touch more price sensitivity at things around our average sell price. But I don't see, so far, the bottom falling out of the consumer. I do see a consumer that looks to be a bit under stress and who's being choosy when they're approaching their purchases. I would say that read-across is consistent for us in what I'm largely seeing across discretionary retail. Thank you.

Unnamed Speaker: I would say anything that feels more like a necessity continues to have

David Rollinson: We also see a little bit of trading down in a little bit of value seeking, not extraordinary. We haven't seen, for example, a big fleet of clearance, but we are seeing maybe a touch more price sensitivity at things around our average sell price. I don't see, so far, the bottom falling out of the consumer. I do see a consumer that looks to be a bit under stress and who's being choosy when they're approaching their purchases.

Unnamed Speaker: reasonable demand.

Unnamed Speaker: We also see a little bit of trading down and a little bit of value-seeking. Not extraordinary. We haven't seen, for example, a big fleet of clearance, but we are seeing...

David Rawlinson: We haven't seen, for example, a big fleet of clearance, but we are seeing maybe a touch more price sensitivity at things around our average sell price. But I don't see, so far, the bottom falling out of the consumer. I do see a consumer that looks to be a bit under stress and who's being choosy when they're approaching their purchases. I would say that read-across is consistent for us and what I'm largely seeing across discretionary retail.

Unnamed Speaker: Maybe a touch more price sensitivity at things around our average sale price.

Unnamed Speaker: so i don't see so far about the bottom falling out of the consumer i do see a consumer that lookves to be

Unnamed Speaker: a bit under stress and who's being choosy when they're approaching their purchases. And I would say I think that read-across is consistent for us and what I'm largely seeing across discretionary retail.

David Rollinson: I think that read across is consistent for us in what I'm largely seeing across discretionary. And then when we look at improving margins through the second half of the year in that environment, is that going to be driven by project-out assistance savings or are there other additional programs underfoot? Yeah, it's mostly project assistance. We keep in mind project assistance operates across a wide variety of variables. So project assistance has hundreds of work streams, some of which are going to things like how we sourced our products and being able to source more efficiency and take some costs out of the sourcing.

Unnamed Speaker: Thank you very much.

David Rawlinson: And then when we look at improving margins through the second half of the year in that environment, is that going to be driven by Project Athens savings, or are there other additional programs under foot?

Bill Wafford: And then when we look at improving margins through the second half of the year in that environment, is that going to be driven by Project Athens savings, or are there other additional programs underfoot?

Karru Martinson: And then when we look at improving margins through the second half of the year in that environment, is that going to be driven by Project Athens savings, or are there other additional programs underfoot?

Speaker Change: and then when we look at improving margins through the second half of the year in that environment is that going to be driven by project out athen savings or there other additional programs underputot

David Rawlinson: Yeah, it's mostly Project Athens, but keep in mind Project Athens operates across a wide variety of variables. So it has hundreds of work streams, some of which are going to things like how we source our products and being able to source them more efficiently and take some costs out of the sourcing. Some of Project Athens is going towards fulfillment expenses and fulfillment rates. Some of Project Athens is going after vendor negotiations where we're not participating in the making of the product, but we're just buying it from vendors.

David Rawlinson: Yeah, it's mostly Project Athens. Keep in mind, Project Athens operates across a wide variety of variables. So Project Athens has hundreds of work streams, some of which are going to things like how we source our products and being able to source more efficiency and take some cost out of the sourcing. Some of Project Athens is going at fulfillment expenses and fulfillment rates. Some of Project Athens is going after vendor negotiations where we're not participating in the making of the product, but we're just buying it from vendors. Some of it's going after making sure we're pricing it correctly and maximizing on a willing-to-spend basis from our customers. So it's a combined effort across things that are having the positive effect on margin, and we still think we have some room to go on those initiatives.

Speaker Change: Yeah, it's mostly Project Athens, but keep in mind, Project Athens...

Speaker Change: operates across a wide variety of variables. So Project Athens has...

Unnamed Speaker: hundreds of work streams, some of which are going to things like how we source our products and being able to source more efficiency and take some cost out of the sourcing.

David Rollinson: Some of project assistance is going at fulfillment expenses, in fulfillment rates; some of project assistance is going after vendor negotiations where we're not participating in the making of the product, but we're just buying it from vendors. Some of it's going after making sure we're pricing it correctly and maximizing on a willing to spend basis from our customers. So it's a combined effort across things that are having the positive effect on margin, and we still think we have some room to go on those initiatives.

Speaker Change: Some of Project Athens is going.

Speaker Change: at fulfillment expenses.

Speaker Change: and fulfillment rates on those projects.

Speaker Change: Athens is going after vendor negotiations where we're not participating in the making of the product, but we're just buying it from vendors. Some of it's going after making sure we're pricing it correctly and

David Rawlinson: Some of it's going after making sure we're pricing it correctly and maximizing on a willing to spend basis from our customers. So it's a combined effort across things that are having a positive effect on margin, and we still think we have some room to go on those initiatives.

Speaker Change: maximizing on a ona

Unnamed Speaker: willing to spend basis from our customers

Speaker Change: So it's a combined effort across things that are having the positive effect on...

Speaker Change: margin and we still think we have some room to go on those initiatives.

David Rawlinson: Okay, and just lastly, my standard question every time: when you look at your capital structure, how are you thinking about that going forward?

Ben: Okay, here's lastly my standard question every time. When you look at your capital structure, how are you thinking about that going forward? This is Ben Orren. Go ahead David, sorry. Go ahead, Ben. Go ahead. I think our primary focus is on extending runway. We have debt coming due in 2025 that will be managed by the revolver or free cash flow, and then going forward. We have a debt that's due in 26, 27, and 28 as the business continues to deliver metric improvement and the markets continue to be or improve for us. We'll look for a transaction sometime in 2025 or, at the latest, early 2026 to address the revolver, and we're going to use free cash flow in the interim to continue to reduce debt.

Bill Wafford: Okay. Just lastly, my standard question every time, when you look at your capital structure, how are you thinking about that going forward?

Karru Martinson: Okay. Just lastly, my standard question every time, when you look at your capital structure, how are you thinking about that going forward?

Speaker Change: okay lastly my stand the question every time you know when you look at your capital structure how are you thinking about that going forward

Ben Oren: This is Ben Oren.

Ben Oren: This is Ben Oren. Go ahead, David. Sorry.

David Rawlinson: Go ahead, David. Sorry. No, go ahead, Ben.

Bill Wafford: No, go ahead, Ben. Go ahead.

Ben Oren: This is Ben Oren.

Ben Oren: I think our primary focus is on extending runway. We have debt coming due in 2025 that will be managed by either the revolver or free cash flow and then going forward with debt that's due in 26, 27, and 28. As the business continues to deliver metric improvement and the markets continue to be or improve for us, we'll look for a transaction sometime in 2025 or, at the latest, early 2026 to address the revolver, and we're going to use free cash flow in the interim to continue to reduce debt. Thank you very much.

Ben Oren: I think our primary focus is on extending runway. We have debt coming due in 2025 that will be managed by either the revolver or free cash flow. And then going forward, debt that's due in 2026, 2027, and 2028, as the business continues to deliver metric improvement and the markets continue to be or improve for us, we'll look for a transaction sometime in 2025 or at the latest, early 2026, to address the revolver. And we're going to use free cash flow in the interim to continue to reduce debt.

Unnamed Speaker: Go ahead, David. Sorry. No, go ahead, Ben. Go ahead.

Operator: Thank you very much; I appreciate it.

Speaker Change: I think our primary focus is on extending runway. We have debt coming due in 2025 that will be managed by either the revolver or free cash flow.

Speaker Change: and then going forward, debt that's due in 2026, 2027, and 2028 as the business continues to deliver metric improvement and the markets continue to be improved for us.

Speaker Change: We'll look for a transaction sometime in 2025 or at the latest, early 2026, to address the revolver. And we're going to use free cash flow in the interim to continue to reduce debt.

Ben: Thank you very much. Appreciate it.

Bill Wafford: Thank you very much. Appreciate it.

Karru Martinson: Thank you very much. Appreciate it.

Operator: Thank you.

Speaker Change: Thank you very much, appreciate it.

Operator: Thank you. The next question is from Carla Casella with J.P. Morgan. Please go ahead.

Carla Casela: The next question is from Carla Casela with JP Morgan. Please go ahead. Hi, great things are taking the question. I wonder if you could give us any color in terms of the sequential performance through the quarter or any kind of an exit rate what you're seeing going into three cubes. You're seeing any change in key trends. Yeah, I wouldn't point out big changes in key trends other than to say, you know, our viewership participates in the larger what you might call a viewership economy. So when you're going through something like the election, a big event like the attempted assassination, vice presidential selections, the Olympics, some of the and the international markets, politically been going on in those markets, those can have relatively temporary effects on viewership.

Carla Casella: The next question is from Carla Casella with JP Morgan. Please go ahead.

Operator: The next question is from Carla Casella with JP Morgan. Please go ahead.

Carla Casella: Thank you.

Speaker Change: The next question is from Carla Casella with J.P. Morgan. Please go ahead.

David Rawlinson: Hi, great, thanks for taking the question. I'm wondering if you could give us any color in terms of just sequential performance through the quarter or any kind of exit rate you're seeing going into 3Q if you're seeing any change in key trends.

Carla Casella: Hi. Great. Thanks for taking the question. I'm wondering if you could give us any color in terms of just sequential performance through the quarter or any kind of an exit rate, what you're seeing going into Q3, if you're seeing any change in key trends.

Carla Casella: Hi, great, thanks for taking the question. I'm wondering if you could give us any color in terms of just sequential performance through the quarter or any kind of an exit rate, what you're seeing going into 3Q, if you're seeing any change in key trends.

David Rawlinson: Yeah, I wouldn't point out big changes in key trends other than to say, you know, our viewership participates in the larger, what you might call a viewership economy. So when you're going through something like the election, big events like the attempted assassination, vice presidential selections, the Olympics, some of the international markets, political events going on in those markets, those can have relatively temporary effects on viewership. So we're managing through those events.

David Rawlinson: Yeah. I wouldn't point out big changes in key trends other than to say our viewership participates in the larger, what you might call, a viewership economy. So when you're going through something like the election, a big event like the attempted assassination, vice presidential selections, the Olympics, and the international markets, political events going on in those markets, those can have relatively temporary effects on viewership. So we're managing through those events. And then I think the general macro consumer is behaving about as you would expect if you read across all of the macro consumer data that you see. I wouldn't point out any trends outside of those going through the quarter or the start of this quarter.

Speaker Change: Yeah, I wouldn't point out big changes and key trends other than to say.

Speaker Change: our viewership

Operator: before Q2 earnings call. During the presentation, all participants will be in the listen only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please press star one on your telephone. As a reminder, this conference will be recorded August 8th.

Speaker Change: the Olympics, some of the international markets, political events going on at those markets.

Speaker Change: those can have relatively temporary effects on

Claire Adams: I would now like to turn the call over to Claire Adams, senior manager investor relations. Please go ahead.

David Rollinson: So we're managing through those events. And then I think I think the general macro consumer is behaving about as you would expect if you read across all of the macro consumer data that you see. I don't, I wouldn't point out any trends outside of those going through the quarter or to start this course.

Speaker Change: vie wership so we're we're managing through those events and then i think

David Rawlinson: And then I think the general macro consumer is behaving about as you would expect if you read across all of the macro consumer data that you see. I don't, I wouldn't point out any trends outside of those going through the quarter or to start this quarter.

Claire Adams: Good morning. Before we begin, we'd like to remind everyone that this call includes certain forward-looking statements within the meeting of the private security's 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 10K and 10Q filed by our company and QVC with the SEC. These forward-looking statements speak only as the date of this call, and QRIT Retail expressly displains any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained here in. To reflect any change in QRIT Retail's expectations with regard there to, or any change in events, conditions, or circumstances on which any such statement is based.

Speaker Change: i think the general macro consumer is behaving about as you would expect if you read across all of the macro consumer data that you see i don't i wouldn't point out any trends outside of those going through the quarter or to startar this quarter

David Rollinson: Okay, and then in the past, you have commented about the average spend per customer on an existing customer versus a best. Any changes there. I mean, we have existing at about 1,600 and the best at like 3,900. Any changes in that or any changes in your best customer numbers as part of your core customer. Yeah, so for the quarter existing customers and keep in mind, existing about half the count and existing about half the count and the vast majority of and the vast majority of the of the dollars. So for existing customers. On a trailing 12 month, I'm sorry about 32 items of 6% year on year and spend was $1,665.

David Rawlinson: Okay, and then in the past, you have commented about the average spend per customer on kind of like an existing customer versus a best customer. Any changes there? I mean, we have existing customers at about 1,600, and the best at about 3,900. Any changes in that, or any changes in your best customer numbers as part of your kind of core customer?

Carla Casella: Okay. And then in the past, you had commented about the average spend per customer on kind of an existing customer versus a best. Any changes there? I mean, we have existing at about $1,600 and the best at $3,900. Any changes in that or any changes in your best customer numbers as part of your kind of core customer?

Carla Casella: Okay and then in the past you have commented about the average spend per customer on kind of like an existing customer versus a best.

Carla Casella: Any changes there? I mean, we have existing at about 1,600 and the best at like 3,900. Any changes in that or any changes in your best customer numbers as part of your kind of core customer?

Claire Adams: Please note that we have published slides to a company that earnings release. On today's call, we will discuss certain non-GAAT financial measures, including adjusted OIVA, adjusted OIVA and regarding the comparable GAAT metrics along with required definitions and reconciliation, including preliminary note and scheduled one to two. Can be found in the earnings press release issue today or our earnings presentation which are available on our website.

David Rawlinson: Yeah, so for the quarter existing customers, and keep in mind, existing is about half the count. Existing is about half the count, and the vast majority of the dollars.

David Rawlinson: Yeah. So for the quarter, existing customers, and keep in mind, existing's about half the count and the vast majority of the dollars. So for existing customers on a trailing 12-month, I'm sorry, about 32 items of 6% year-over-year, and spend was $1,665. That's up 8% year-over-year. The other thing we were encouraged by for existing customers, we saw retention tick up a bit year-over-year. And then for best customers, best customers purchased on average 76 items over the last 12 months. That's up 3% year-over-year. And they spent on average $3,950, and that's up 6% year-over-year.

Operator: and

Speaker Change: Yeah, so for the quarter existing customers and keep in mind existing is about half the count.

Unnamed Speaker: Existing customers make up about half the count and the vast majority of the dollars. So for existing customers on a trailing 12-month, I'm sorry, about 32 items up 6% year-on-year, and spend was $1,665, that's up 8% year-on-year. The other thing we were encouraged by for existing customers, we saw retention tick up a bit year-on-year. And then for best customers, and best customers purchased on average 76 items over the last 12 months, that's up 3% year-on-year, and they spent on average $3,950, which is up 6% year-on-year.

Unnamed Speaker: Existing is about half the count in the vast majority of

David Rawlinson: So for existing customers on a trailing 12-month, I'm sorry, about 32 items up 6% year-on-year, and spend was $1,665. That's up 8% year-on-year. The other thing we were encouraged by for existing customers, we saw retention tick up a bit year-on-year, and then for best customers, who purchased on average 76 items over the last 12 months. That's up 3% year-on-year, and they spent on average $3,950; that's up 6% year-on-year.

Unnamed Speaker: and the vast majority of the dollars. So, for existing customers...

Claire Adams: Today, speaking on the earnings call, we have QRIT Retail President and CEO David Rollinson, QRIT Retail Group CFO, Bill Wofford, and QRIT Retail Executive Chairman, present site. Now I'll hand a call over to David Rollinson.

Unnamed Speaker: on a trailing 12-month, I'm sorry, about 32 items of 6% year-on-year, and spend was $1,665.

David Rollinson: That's up 8% year on year. The other thing we were encouraged by for existing customers, we saw retention tick off a bit year on year. And then for best customers and best customers purchased on average. It's 76 items over the last 12 months. That's up 3% year on year, and they spent on average $3,950, and that's up 6% year on year. Okay, that's great.

David Rollinson: Thank you, Claire, and good morning to everyone. Thank you for joining us today and for your interest in QRIT Retail. We delivered a solid quarter of earnings, while revenue was inline with overall discretionary retail and a challenge macro backdrop. We expanded gross margin and grew adjusted OIVA though our continuing focus on cost and efficiency. Total company revenue declined, which reflected lower volume, particularly at QXH and cornerstone brands. QXH revenue was pressured by macro factors, including inflation, as consumers continue to spend mostly on necessities and less on discretionary purchases.

Unnamed Speaker: that's up eight percent

Unnamed Speaker: year-on year those other things wewerere encouraged by for existing customers we saw retention tickup a it year-on-year and then for best customers

Unnamed Speaker: and Best Customers purchased on average 76 items over the last 12 months. That's up 3% year-on-year. And they spent on average $3,950, and that's up 6% year-on-year.

David Rawlinson: Okay, that's great. And then one more, e-commerce was up nicely as a percentage for both U.S. and international. I'm just wondering, is the e-commerce business similar in terms of profitability as a core business?

Carla Casella: Okay. That's great. And then one more. E-commerce was up nicely as a percentage for both US and international. I'm just wondering, is the e-commerce business similar in terms of profitability as the core business?

David Rollinson: And then one more e-commerce was nicely at the percentage for both US and international. I'm just wondering, is the e-commerce business similar in terms of profitability as the core business? Yeah, I mean, Carla, everything directs me. If you think about it, they're both direct, you know, direct consumer businesses on the fulfillment side. You know, potentially depending on product mix on what's there, you could see a little bit a little bit of different market structure, but by and large, the economics of those, they're the same as, you know, when you think about something that's coming off a television as well.

Speaker Change: okay that's fgreatight and then one more e-commerce was nicely at the percentage for both s and international i'm just wondering is that e-commerce business similar in terms of profitability as core business

David Rollinson: The housing market has continued to pressure the cornerstone business, as existing homes sales, and housing starts are historically low, and mortgage rates remain at peak levels. Despite these macro and top line pressures, we are pleased to report gross margin expansion for the fifth consecutive quarter with margin expansion at all of our business units. These gains were due to continued product margin and fulfillment improvement from our Project Athens initiatives. In addition to gross margin gains, we remained disciplined in cost management and lowered total company SGNA expenses, resulting in total company adjusted OIVA dog growth and adjusted OIVA dog margin expansion for the fourth consecutive quarter.

Bill Wafford: Yeah. I mean, Carla, everything directs me. If you think about it, they're both direct-to-consumer businesses on the fulfillment side. Potentially, depending on product mix on what's there, you could see a little bit of different margin structure. But by and large, economics of those, they're the same as when you think about something coming off of television as well.

David Rawlinson: Yeah, I mean, Carla, and Drexley, if you think about it, they're both direct-to-consumer businesses on the fulfillment side, potentially, depending on product mix on what's there, you could see a little bit, a little bit of different margin structure, but by and large, the economics of those, they're the same as, you know, when you think about something coming off of television as well. Okay, great.

Unnamed Speaker: Yeah, I mean, Carla, I think, if you think about it, they're both direct, you know, direct-to-consumer businesses on the fulfillment side, you know, potentially depending on product mix on what's there, you could see a little bit, a little bit of different margin structure, but by and large economics of those, they're the same as, you know, when you think about something that's coming off of television as well.

Operator: Okay, great. Thank you so much.

Carla Casela: Okay, great. Thank you so much. Thank you.

Carla Casella: Okay. Great. Thank you so much.

David Rawlinson: Thank you.

Speaker Change: Okay, great. Thank you so much.

Operator: Thank you. The next question is from William Reuter with Bank of America. Please go ahead.

William Router: The next question is from William Router with Bank of America. Please go ahead. Hey, guys, good morning.

William Router: The next question is from William Router with Bank of America. Please go ahead. Hey guys, good morning. This is Rob on behalf of Bill.

Operator: The next question is from William Router with Bank of America. Please go ahead.

William Router: thank you

Speaker Change: Thank you. The next question is from William Rauter with Bank of America. Please go ahead.

David Rawlinson: Just one from us. Appreciate you guys discussing Project Athens Savings, but I was wondering if you could maybe touch on freight cost expectations for the remainder of 2024 and maybe any updated thoughts related to any disruptions in the Red Sea. Thank you.

Rob: Hey guys, good morning. This is Rob on behalf of Bill.

Rob Rigby: Hey, guys. Good morning. This is Rob on for Bill. Just one from us. Appreciate you guys discussing Project Athens savings, but was wondering if you could maybe touch on freight cost expectations for the remainder of 2024 and maybe any updated thoughts related to any disruptions in the Red Sea. Thank you.

Rob: This is Rob on for Bill. Just one from us. Appreciate you guys discussing project deaf and savings, but I was wondering if you could maybe touch on freight cost expectations for the remainder of 2024. And it would be any updated thoughts related to any disruptions in the Red Sea. Thank you. Sorry, yes, so we're seeing continuing to see some disruption. I think in the US, we have relatively little exposure. I think about 15% of our volume comes through the Suez Canal, so it hasn't been a big impact. We've seen more impact in Europe; about 75% goes through the canal.

Operator: Hey guys, good morning. This is Rob on for Bill. Just one from us.

William Router: I appreciate you guys discussing Project Athens savings, but I was wondering if you could maybe touch on freight cost expectations for the remainder of 2024, and maybe any updated thoughts related to other disruptions in the Red Sea. Thank you.

David Rollinson: We improved profitability in our core video commerce businesses, with QXH adjusted OIVA dog up 5 percent and QVC international adjusted OIVA dog up 8 percent and constant current. Total company profitability was pressured by the crime and cornerstone from continued housing market challenges as well as some incremental marketing expense.

David Rawlinson: So we're continuing to see some disruption. I think in the U.S., we have relatively little exposure.

David Rawlinson: Sorry. Yeah. So we're continuing to see some disruption. I think in the US, we have relatively little exposure. I think about 15% of our volume comes through the Suez Canal, so it hasn't been a big impact. We've seen more impact in Europe. About 75% goes through the canal. We've been targeting vessels that are going through alternative routes, and we've had some success there. It has caused some volatility in supply for our European businesses, but we've generally now built in more buying time and vendor order lead times to help counteract that. So I wouldn't say it's been a huge impact on the business. What's actually been a little bit more impactful has been, over the course of Q2, the availability of vessel capacity has come in, and that's resulted in a shortage in the global ocean vessel capacity.

Speaker Change: Sorry, yeah, so...

Speaker Change: We're seeing continuing to see some disruption I think in the u.s.

David Rollinson: Looking at the QXA business in more detail, this quarter we invested in the age of possibility campaign we launched in April where we gathered 50 powerful influential women, including celebrities, business women and activists, to be QVC brand ambassadors. Since launch, we have experienced strong initial reaction to this campaign with 38 billion earned media impressions, 330,000 new Facebook community members, a nearly 200% increase in the number of QVC social followers and more than a million visits to QVC's campaign website.

David Rawlinson: I think about 15% of our volume comes through the Suez Canal, so it hasn't had a big impact. We've seen more impact in Europe; about 75% goes through the canal. We've been targeting vessels that are going through alternative routes, and we've had some success there. It has caused some volatility and supply problems for our European businesses, but we've generally now built in more buying time and vendor order lead times to help counteract that.

Speaker Change: We have relatively little exposure. I think about 15% of our volume comes through the Suez Canal, so it hasn't been a big impact. We've seen more impact in Europe . About 75% goes through the canal. We've been targeting vessels.

David Rollinson: We've been targeting vessels that are going through alternative routes, and we've had some success there. It has caused some volatility and supply for our European businesses, but we've generally now built in more buying time and then door to lead times to help counteract that. So I wouldn't say it's been a huge impact on the business. What's actually been a little bit more impactful has been, over the course of Q2, the availability of vessel capacity has come in, and that's resulted in a shortage in the global ocean vessel capacity. That's driving up rates, especially on the spot market, and so those rate increases were manageable in Q2, but we are anticipating more volatility on deliveries and container prices as we go into Q3.

Speaker Change: that are going through alternative routes, and we've had some success there. It has caused some volatility in supply for our European businesses, but we've generally now built in more buying time and vendor-order lead times.

David Rollinson: We saw strong demand from age of possibility related brands in Q2, with collective demand for the existing 12 brands of low double digits after the campaign launch and particular strength from Valerie Farhill, Kim Carvelle, Apparel and Beauty, and Doris Dalton's Dalton. One of our age of possibility when essential 50 is Jennifer Dawson, we would like to get with Jennifer and all of those who celebrate Happy National Pickleball Day. We are also pleased to announce that we recently signed a multi-year agreement with USA Pickleball, the fastest growing sport in America for three consecutive years.

Speaker Change: to help counteract that so i wouldn't say it's been i wouldn't say it's been

David Rawlinson: So I wouldn't say it's had a huge impact on the business. What's actually been a little bit more impactful has been, over the course of Q2, the availability of vessel capacity has come in, and that's resulted in a shortage of global ocean vessel capacity. That's driving up rates, especially on the spot market, and so those rate increases were manageable in Q2, but we are anticipating more volatility on deliveries and container prices as we go into Q3. So that, plus the potential labor negotiations with the East Coast longshoremen, are both things we're paying a lot of attention to. [inaudible]

Speaker Change: a huge impact on the business.

Operator: Very helpful. Thank you.

Speaker Change: What's actually been a little bit more impactful has been, over the course of Q2, the availability of BESO capacity.

Speaker Change: has come in and that's resulted in a shortage in the global ocean vessel capacity. That's a driving up rate especially on the

David Rawlinson: That's driving up rates, especially on the spot market. And so those rate increases were manageable in Q2, but we are anticipating more volatility on deliveries and container prices as we go into Q3. So that plus the potential labor negotiations with the East Coast longshoremen are both things we're paying a lot of attention to.

Speaker Change: the spot market and so those rate increases were manageable.

David Rollinson: Pickleball has 8.9 million players in 2023 and 50,000 attendees and 2.6 million television viewers for its 2023 national championship. QVC will be the exclusive retail partner and exclusive broadcast partner of USA Pickleball for its gold and ticket events as well as this national tournament each November. QVC will broadcast the tournament's live on QVC Plus, create unique behind-the-scenes content and QA products and partnership with USA Pickleball.

Speaker Change: in Q2, but we are anticipating more volatility on deliveries and container prices.

David Rollinson: So that plus the potential labor negotiations with the East Coast longshoremen are both things we're paying a lot of attention to. Thank you.

Speaker Change: as we go into Q3. So that plus the potential labor negotiations with the East Coast longshoremen are both things we're paying a lot of attention to.

Operator: Very helpful. Thank you. Thank you. Ladies and gentlemen, the last question for today is from Hale Holden with Barclays. Please go ahead.

William Router: Very helpful. Thank you.

Hale Holden: Ladies and gentlemen, the last question for today is from Hale Holden with Barclays. Please go ahead. Thank you. I have two quick questions. The first one is the cash you disclosed to Cornerstone. Is that a new disclosure? I don't recall it in the past. Is that sort of the cash that's been there in the last couple of quarters? I think we were just trying to make sure that we were, you know, being comprehensive in the disclosure when we were talking about the cash at the various entities as all. Okay.

Hale Holden: Ladies and gentlemen, the last question for today is from Hale Holden with Barclays. Please go ahead.

William Router: Thank you.

Speaker Change: Ladies and gentlemen the last question for today is from Hale Holden with Barclays. Please go ahead.

Hale Holden: Thank you. I have two quick questions. The first one is the cash you disclosed at Cornerstone. Is that a new disclosure? I don't recall it in the past, or is that sort of the cash that's been there in the last couple quarters?

Questioner: Thank you. I have two quick questions. The first one is the cash you disclosed at Cornerstone. Is that a new disclosure? I don't recall it in the past, or is that sort of the cash that's been there in the last couple quarters?

Hale Holden: Thank you. I had two quick questions. The first one is the cash you disclosed at Cornerstone. Is that a new disclosure? I don't recall it in the past, or is that sort of the cash that's been there in the last couple of quarters?

Questioner: Thank you. I have two quick questions. The first one is the cash you disclosed at Cornerstone, is that a new disclosure? I don't recall it in the past, or is that sort of the cash that's been there in the last couple quarters?

David Rollinson: Now moving on to QXH customers and merchandise. On a quarterly basis, QXH customer count declined 5% in line without volume decline. However, as you can see on flat 8 of our presentation, our count on a trailing 12 month basis was down only 1% sequentially in the 12 months ending June 30, compared to March. This continues to show stabilization of our file. Our existing customers continue to purchase at healthy levels, spending on average $1,665 and purchasing 32 items in the 12 months ending June 30.

David Rawlinson: I think we were just making sure that we were, you know, being comprehensive in the disclosure when we were talking about the cash of the various entities.

Bill Wafford: I think we were just trying to make sure that we were being comprehensive in the disclosure when we were talking about the cash at the various entities is all.

Speaker Change: I think we were just making sure that we were, you know, being comprehensive in the disclosure when we were talking about the caches of the various entities is all.

Hale Holden: Okay. And then my second question is just a follow-up on the shipping question. Have you seen any of your... I guess really, mainly Pacific freight carriers break your contracted rates and push you more into spot, or are they still holding their earlier in the year contracted rates?

Hale Holden: Okay. My second question is just a follow-up on the shipping question. Have you seen any of your, I guess, really mainly Pacific freight carriers break your contracted rates and push you more into spot, or are they still holding their earlier-in-the-year contracted rates?

David Rollinson: And then my second question is just to follow up on the shipping question. Have you seen any of your, I guess really mainly Pacific carriers break your contracted rates and pushing more into spot? Are they still holding their earlier-in-the-year contracted rates? Yeah, I would say we operate in a combination of spot and contract rates. Right. So there had, you know, David talked about the pressure with available capacity that we saw during the period. But I think, you know, the teams have done a pretty good job of managing the combination of spot and, you know, kind of term contracts, you know, across the portfolio to maintain, you know, freight rates.

Speaker Change: Okay. And then my second question is just a follow-up on the shipping question. Have you seen any of your...

Questioner: I guess really mainly Pacific freight carriers break your contracted rates and push you more into spot, or are they still holding their earlier in the year contracted rates?

Questioner: I guess really mainly Pacific freight carriers break your contracted rates and push you more into spot or are they still holding their earlier in the year contracted rates?

Bill Wafford: Yeah. I would say we operate in a combination of spot and contract rates, right? So there has David talked about the pressure with available capacity that we saw during the period, but I think the teams have done a pretty good job of managing the combination of spot and kind of term contracts across the portfolio to maintain freight rates.

David Rawlinson: Yeah, I would say we operate in a combination of spot and contract rates, right? So there has been, you know, David talked about the pressure with available capacity that we saw during the period, but I think, you know, the teams have done a pretty good job of managing the combination of spot and, you know, kind of term contracts across the portfolio to maintain freight rates.

Speaker Change: Yeah, I would say we operate in a combination of spot and contract rates, right? So there has, you know, David talked about the pressure with available capacity that we saw.

David Rollinson: That is up 8% and 6% year-on-year respectively. Retention of our existing customer file was also up in the quarter. At QVC, our best customers, those who buy 20 or more items annually, also continue to purchase at very attractive levels. In the 12 months ending June 30, they bought the 76 items and spent $3,950 on average, up 3% and 6% year-on-year respectively. [inaudible] Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Adjusted Orbit Out Marching was driven by gross margin expansion and favorable administrative expenses.

Speaker Change: during the period, but I think, you know, the teams have done a pretty good job of managing the combination of spot and, you know, kind of term contracts, you know, across the portfolio to maintain, you know, freight rates.

Hale Holden: And then one final one. I know this has come up on the last couple of calls, but anything you can tell us to help us understand what you may or may not be able to do to mitigate tariffs, depending on, I guess, which way the coin flips in the election.

David Rollinson: Got it.

Hale Holden: Got it. And then one final one. I know this has come up on the last couple of calls, but anything you can tell us to help us understand what you may or may not be able to do to mitigate tariffs depending on, I guess, which way the coin flips on the election?

David Rollinson: And then one, one final one. I know this has come up on the last couple calls, but anything you can tell us to help us understand what you may or may not be able to do to mitigate tariffs, depending on, I guess, which way the coin flips on the election. So we have, since really since the supply chain crisis, tried to create some diversity in our sources of supply. You know, less than half of our assortment ends up being impacted by tariffs. And even that half, the tariff rate is sort of, sort of mid teens.

Questioner: And then one final one. I know this has come up on the last couple of calls, but anything you can tell us to help us understand what you may or may not be able to do to mitigate tariffs, depending on, I guess, which way the coin flips on the election.

Unnamed Speaker: So, we have since, um... Really since the supply chain crisis tried to create a level of difficulty around tariffs that is not manageable for us, given where we are today.

David Rawlinson: So, we have since, really since the supply chain crisis tried to create some diversity and our sources of supply, less than half of our assortment ends up being impacted by tariffs, and even that half, the tariff rate is sort of mid-teens. We think we have a number of continued avenues available to us to diversify supply, so we don't see a scenario either, no matter which way the election unfolds, that creates a level of difficulty around tariffs that is not manageable for us given where we are today.

David Rawlinson: So we have, really, since the supply chain crisis, tried to create some diversity, and our sources of supply, less than half of our assortment, ends up being impacted by tariffs. And even that half, the tariff rate is sort of mid-teens. We think we have a number of continued avenues available to us to diversify supply. So we don't see a scenario, no matter which way the election unfolds, that creates a level of difficulty around tariffs that are not manageable for us given where we are today.

Unnamed Speaker: Really since the supply chain crisis tried to create

Unnamed Speaker: some diversity.

Speaker Change: And our sources of supply, less than half of our assortment ends up being impacted by tariffs, and even that half, the tariff rate, is sort of mid-teens.

David Rollinson: We think we have a number of continued avenues available to us to diversify supply. So we don't, we don't see a scenario either, no matter which way the election unfolds, that creates a level of difficulty around tariffs that are not manageable for us. Given where we are today. Great. Thank you so much. I appreciate it.

Unnamed Speaker: We think we have a number of continued avenues available to us to diversify supplies.

Unnamed Speaker: We don't see a scenario either, no matter which way the election unfolds, that creates...

Unnamed Speaker: a level of difficulty around tariffs that are not manageable for us given where we are today.

Operator: Great. Thank you so much. I appreciate it.

Questioner: Great. Thank you so much. I appreciate it.

Hale Holden: Great. Thank you so much. I appreciate it.

Operator: Thank you, operator. I think we're done. And thank you to the listening audience for your interest in Curate. We look forward to speaking with you next quarter at not sooner. Great. Thank you.

Greg Maffei: Thank you, operator. I think we're done. Thank you to the listening audience for your interest in Qurate. We look forward to speaking with you next quarter, if not sooner.

Questioner: Great. Thank you so much. I appreciate it.

Speaker Change: thank you operator i think we're done and thank you for the listening audience for your interest in chake we look forward this speaking with you next quarter at non sooner

David Rawlinson: Great. Thank you.

Operator: Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation. Qur'an

Bill Wofford: Bill will provide more details on our Adjusted Orbit Out expansion momentarily.

Bill Wofford: QVC International delivered another very solid quarter. We reported stable revenue and adjusted orbit out growth for the fourth consecutive quarter. Revenue performance was led by QVC UK and Japan of mid and low single digits respectively. Both countries saw sales growth in most categories with the UK seeing particular strength in beauty, jewelry, accessories, and hung. And Japan seeing strength in jewelry, electronics, and apparel. QVC's international adjusted orbit out growth was driven by strong product margin expansion and cost control. Partially offset by fulfillment pressure from higher volume wages and carrier rates.

Bill Wofford: At Cornerstone, revenue declined 14% due to low demand from the continued housing pressures I mentioned earlier. Despite this, we generated gross margin expansion from lower supply chain costs. The gross margin gain was more than offset by the leveraging of SG&A costs resulting in a $6 million adjusted orbit out decline.

Bill Wofford: Now looking at programming, total min is viewed on our five channels were down 1% this quarter, including streaming total viewership was up 1%. Our streaming business is seeing strong momentum, while still relatively small compared to our traditional channels. Revenue, total min is viewed, and monthly active users all grew well over double digits in Q2.

Bill Wofford: On our last call, we announced that New York Times' death-selling author, activist, actor and writer, Dizzy Phillips, was returning to late-night to host the talk show exclusively on QVC Plus, our streaming platform. The show demonstrates how celebrity content attracts viewers, and May and June, 63 percent of the show's viewers were new customers. According to a survey on social media, the show reached viewers across generations with more than 80 percent of viewers, 49 are younger.

David Rollinson: Looking into the second half of 2024, we anticipate consumers will remain selective in their spending, giving continued macrochallenges, and with the election and the Olympics competing for their time. During this time, we plan to continue discipline cost management and expect to realize further margin expansion from our Athens initiatives.

David Rollinson: We're excited to welcome her to this key leadership role in our another solid quarter of earnings, sustaining revenue consistent with the overall discretionary market, generating gross margin expansion, and adjusted orthodox growth. We remain steadfastly focused on executing project Athens, and we are positioning our business for growth and demand generation in future years.

David Rollinson: We look forward to providing more information on future calls and at investor day.

Bill Wofford: Now, I'll turn the call over to Bill to discuss the financial results of each of our businesses in more detail. Thank you, David, and good morning, everyone. Unless otherwise noted, my comments compare financial performance for the three months ended June 30th, 2024, to the same period in 2023, starting with QXH. Revenue declined 4% due to lower-unit volume and shipping and handling revenue partially offset by higher-ever selling price. From a category perspective, QXH experienced growth in jewelry, which was offset by the clients mainly in beauty, apparel, and accessories.

Bill Wofford: Home revenue decreased 1% due to soft demand for gardening and food. Apparel declined 4% due to soft demand for clearance and spring apparel, partially offset by gains in certain brands related to QVC's age of possibility as well as Diane Gilman's 30th anniversary celebration at HSN. Beauty declined 9% reflecting lower demand for bathroom body, accessories declined 5% due to lower demand for loungewear and handbags, electronics declined 11% due to softness in computers and smart homes.

Bill Wofford: Jewelry grew 12% reflecting successful fire-light, lab-grown diamonds, and a today's special value for ultra-fine silver. Adjusted oivina margin increased 110 basis points driven by continued gross margin gains. Gross margin expanded 160 basis points driven by favorable product margins and fulfillment expense. Product margins increased 105 basis points due to higher initial margins from project Athens initiatives, partially offset by lower shipping and handling revenue. Fulfillment expenses improved 60 basis points due to efficiencies from Athens and average selling price leverage.

Bill Wofford: SGNA was unfavorable, approximately 55 basis points, of which 105 were from higher marketing expenses, partially offset by lower administrative costs. Marketing expenses increased due to the launch of KVC's age of possibility campaign in April and associated brand marketing. Administrative expenses declined as we comped project Athens-related costs in the prior year period. We continue to be displaying in our cost management to sustain adjusted orbital margin gains while investing in future growth. Sales delivery has been impacting the business in a challenged macro backdrop. We believe the marketing investments we are making are important in driving the business for the long term.

Bill Wofford: From a category perspective, KVC International experienced constant currency growth in jewelry, beauty, and electronics with a decline in home. Adjusted orbital increased 8% and adjusted orbital margin expanded 75 basis points. Gross margin increased 10 basis points driven by increased initial margins due to a mixed shift to higher margin products and favorable vendor negotiations. Product margin gains were partially offset by higher fulfillment costs, reflecting higher unit volume, and increased wages and trade rates, reflecting inflationary pressures. SG&A was favorable primarily due to lower marketing and outside service costs.

Bill Wofford: Moving to cornerstone. Revenue declined 14% as we experienced soft demand across our home brands due to challenges in the macro environment. Gross margin expanded 320 basis points due to favorable supply chain costs.

Bill Wofford: These gains were more than offset by leveraging a SG&A expenses, resulting in that adjusted orbit at decreasing 6 million compared to last year.

Bill Wofford: Turning the cash flow on the balance sheet. In the first half of 2024, pre-cash flow was a source of $164 million versus a source of 6 million last year, excluding insurance proceeds. In the second quarter of 2023, we received $280 million in insurance proceeds related to the Rocky Mount Fire. The increase in cash flow net of insurance proceeds was primarily due to lower payments for TV distribution rights this year. In the first six months, we spent 13 million on TV renewals on renewals of our TV distribution contracts and 94 million on capital expenditure.

Bill Wofford: Retail Retail Retail[inaudible] QVC leverage ratio increased from March 31st primarily due to certain addbacks no longer impacting the calculation. Finally, on administrative note, on June 10th we received another notice from NASDAQ that QRTEA's closing bid price had fallen below $1 per share for 30 consecutive business days. As in the past, this notice begins a period of 180 calendar days to regain compliance. Which means the stock needs to have a closing bid of $1 or more for 10 consecutive business trading days for continued listing on NASDAQ. While there may be an additional grace period, we could be eligible for.

Bill Wofford: We remain focused on sustaining improved execution and financial performance. Q2 was the 5th consecutive quarter of gross margin expansion and the 4th consecutive quarter of adjusted over the growth. 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.

Greg: Now I'll turn the call over to Greg. Thanks Bill. As you heard, there's another solid quarter in a difficult macro environment. Great to see continued gross margin expansion and adjusted over the growth. QRTEA is focused on execution and making progress on new and creative initiatives like streaming in the age of possibility. They're also paying close attention to the balance sheet. You heard about reducing the revolver balance by 70 million adjusted order improvement and net debt paydown improving leverage. And we will continue to assess incremental opportunities to improve the balance sheet.

Greg: Our annual investor day will be Thursday November 14th in New York. Please save the date additional details we provided soon. And we hope to see many of you there and with that operator, we'll open the line for questions.

Operator: Thank you. Ladies and gentlemen, we will now be conducting a question and answer session. If you would like to ask a question, please press star one on a telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two. If you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Ladies and gentlemen, we will wait for a moment while the question you pose.

Karu Manticin: The first question comes from Karu Manticin with Jeffree's company. Please go ahead. Good morning.

David Rollinson: I'm trying to get a little bit of an insight onto the consumer, certainly understanding that they're pulling back on discretionary, but then I look at your breakdown where jewelry sales were up 12%. What are you seeing on that trend for consumer spend? Is it getting worse? What's the health of the consumer that you guys see out there? Yeah, it's a good question. I'd say it's a hard read. I'd make a couple of observations.

David Rollinson: You have as much access to the macro data as I do, but obviously we're paying attention to variable interest rates, environments, and the effect that has on spending an employment rate, continued pressure on housing, obviously a lot of things going on in the external environment, elections around the world, the limbics, other things that could affect consumer sentiment. I would say the biggest things we're seeing from our consumer are continued being very choiceful.

David Rollinson: That's not quite the same as the pocketbook being closed, but it does mean that you have to really excite. When our customer is excited, there's not necessarily massive price activity. We're continuing to be able to sell at volume, high price electric bikes at times, high price jewelry at times, but on the margin, the willingness to make purchases where she's not extremely excited by the value. I would say it's softer than it has been.

David Rollinson: I would say anything that feels more like a necessity continues to have reasonable demand. We also see a little bit of trading down in a little bit of value seeking, not extraordinary. We haven't seen, for example, a big fleet of clearance, but we are seeing maybe a touch more price sensitivity at things around our average sell price. I don't see so far the bottom falling out of the consumer. I do see a consumer that looks to be a bit under stress and who's being choosy when they're approaching their purchases.

David Rollinson: I think that read across is consistent for us in what I'm largely seeing across discretionary And then when we look at improving margins through the second half of the year in that environment, is that going to be driven by project-out assistance savings or are there other additional programs underfoot? Yeah, it's mostly project assistance. We keep in mind project assistance operates across a wide variety of variables. So project assistance has hundreds of work streams, some of which are going to things like how we sourced our products and being able to source more efficiency and take some costs out of the sourcing.

David Rollinson: Some of project assistance is going at fulfillment expenses, in fulfillment rates, some of project assistance is going after vendor negotiations where we're not participating in the making of the product, but we're just buying it from vendors, some of it's going after making sure we're pricing it correctly and maximizing on a willing to spend basis from our customers. So it's a combined effort across things that are having the positive effect on margin and we still think we have some room to go on those initiatives.

Ben Orren: Okay, here's lastly my standard question every time. When you look at your capital structure, how are you thinking about that going forward? This is Ben Orren. Go ahead David, sorry. Go ahead, Ben. Go ahead. I think our primary focus is on extending runway. We have debt coming due in 2025 that will be managed by the revolver or free cash flow and then going forward. We have a debt that's due in 26, 27 and 28 as the business continues to deliver metric improvement and the markets continue to be or improve for us.

Ben Orren: We'll look for a transaction sometime in 2025 or at the latest early 2026 to address the revolver and we're going to use free cash flow in the interim to continue to reduce debt. Thank you very much. Appreciate it. Thank you.

Carla Casela: The next question is from Carla Casela with JP Morgan. Please go ahead. Hi, great things are taking the question.

David Rollinson: I wonder if you could give us any color in terms of the sequential performance through the quarter or any kind of an exit rate what you're seeing going into three cubes. You're seeing any change in key trends. Yeah, I wouldn't point out big changes in key trends other than to say, you know, our viewership participates in the larger what you might call a viewership economy. So when you're going through something like the election, a big event like the attempted assassination vice presidential selections, the Olympics, some of the and the international markets politically been going on in those markets, those can have relatively temporary effects on viewership.

David Rollinson: So we're we're managing through those events. And then I think I think the general macro consumer is behaving about as you would expect if you read across all of the macro consumer data that you see. I don't I wouldn't point out any trends outside of those going through the quarter or to start this course.

David Rollinson: So for existing customers. On a trailing 12 month, I'm sorry about 32 items of 6% year on year and spend was $1,665. That's up 8% year on year. The other thing we were encouraged by for existing customers, we saw retention tick off a bit year on year. And then for best customers and best customers purchased on average. It's 76 items over the last 12 months. That's up 3% year on year and they spent on average $3,950 and that's up 6% year on year.

Carla Casela: Okay, that's great.

David Rollinson: And then one more e-commerce was nicely at the percentage for both US and international. I'm just wondering, is the e-commerce business similar in terms of profitability as the core business? Yeah, I mean, Carla, everything directs me. If you think about, they're both direct, you know, direct consumer businesses on the fulfillment side. You know, potentially depending on product mix on what's there, you could see a little bit a little bit of different market structure, but by and large economics of those, they're the same as, you know, when you think about something that's coming off a television as well.

Carla Casela: Okay, great. Thank you so much. Thank you.

William Router: The next question is from William Router with Bank of America. Please go ahead. Hey, guys, good morning. This is Rob on for Bill. Just one from us. Appreciate you guys discussing project deaf and savings, but I was wondering if you could maybe touch on freight cost expectations for the remainder of 2024. And it would be any updated thoughts related to any disruptions in the Red Sea. Thank you. Sorry, yes, so we're seeing continuing to see some disruption.

William Router: I think in the US, we have relatively little exposure. I think about 15% of our volume comes through the Suez Canal, so it hasn't been a big impact. We've seen more impact in Europe, about 75% goes through the canal. We've been targeting vessels that are going through alternative routes and we've had some success there. It has caused some volatility and supply for our European businesses, but we've generally now built in more buying time and then door to lead times to help counteract that.

William Router: So I wouldn't say it's been a huge impact on the business. What's actually been a little bit more impactful has been over the course of Q2, the availability of vessel capacity has come in, and that's resulted in a shortage in the global ocean vessel capacity. That's driving up rate, especially on the spot market, and so those rate increases were manageable in Q2, but we are anticipating more volatility on deliveries and container prices as we go into Q3.

David Rollinson: So that plus the potential labor negotiations with the East Coast Longshoremen are both things we're paying a lot of attention to. Thank you.

Hale Holden: Ladies and gentlemen, the last question for today is from Hale Holden with Barclays. Please go ahead. Thank you. I have two quick questions. The first one is the cash you disclosed to Cornerstone. Is that a new disclosure? I don't recall it in the past. Is that sort of the cash that's been there in the last couple quarters? I think we were just trying to make sure that we were, you know, being comprehensive in the disclosure when we were talking about the cash at the various entities as all.

Bill Wofford: Okay. And then my second question is just to follow up on the shipping question. Have you seen any of your, I guess really mainly Pacific carriers break your contracted rates and pushing more into spot? Are they still holding their earlier in the year contracted rates? Yeah, I would say we operate in a combination of spot and contract rates. Right. So there had, you know, David talked about the pressure with available capacity that we saw during the period. But I think, you know, the teams have done a pretty good job of managing the combination of spot and, you know, kind of term contracts, you know, across the portfolio to maintain, you know, freight rates.

Bill Wofford: Got it. And then one, one final one. I know this has come up on the last couple calls, but anything you can tell us to help us understand what you may or may not be able to do to mitigate tariffs, depending on, I guess, which way the coin flips on the election. So we have since, really since the supply chain crisis tried to create some diversity and our sources of supply, you know, less than half of our assortment ends up being impacted by tariffs.

Bill Wofford: And even that half, the tariff rate is sort of, sort of mid teens. We think we have a number of continued avenues available to us to diversify supply. So we don't, we don't see a scenario either, no matter which way the election unfolds, that creates a level of difficulty around tariffs that are not manageable for us.

Hale Holden: Given where we are today. Great. Thank you so much. I appreciate it. Thank you, operator. I think we're done. And thank you to the listening audience for your interest in curate. We look forward to speaking with you next quarter at not sooner. Great. Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation. Qur'an

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