Q2 2024 Qurate Retail Inc Earnings Call

August 8, 2024

Speaker Change: comment and we'll see you next time. Have a lovely day. Till then, ha ha. Ha ha, bye bye.

Operator: Ladies and gentlemen, welcome to the Qurate Retail Inc. 2024 Q2 presentation on Inscore. During the presentation, all participants will be in the listen-only mode. Afterward, 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 on August 8th. I would now like to turn the call over to Claire Adams, Senior Manager, Investor Relations. Please go ahead.

Operator: Ladies and gentlemen, welcome to the Curate Retail Inc. 2024 Q2 earnings call. During the presentation, all participants will be in the listen-only mode. Afterward, we will conduct a question-and-answer session. At that time, if you have a question, please press star 1 on your telephone. As a reminder, this conference will be recorded on August 8th. I would now like to turn the call over to Claire Adams, Senior Manager, Investor Relations. Please go ahead.

Operator: Ladies and gentlemen, welcome to the Qurate Retail, Inc. 2024 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 8 August 2024. I would now like to turn the call over to Claire Adams, Senior Manager, Investor Relations. Please go ahead.

Claire Adams: Information regarding the Comparable Gap Metrics, along with required definitions and reconciliations, including a Preliminary Note and Schedules 1-2, can be found in the Earnings Press Release issued today or our Earnings Presentation, which is available on our website.

Speaker Change: Ladies and gentlemen, welcome to the Curate Retail Inc. 2024 Q2 earnings call.

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

Speaker Change: At that time, if you have a question, please press star 1 on your telephone.

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

David: These gains were due to continued product margin and fulfillment improvement from our Project Athens initiative. However, total company profitability was pressured by a decline in revenue and profit from continued housing market challenges as well as some incremental marketing expense.

Speaker Change: I would now like to turn the call over to Claire 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 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 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 Qurate Retail expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements 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.

Speaker Change: good morning before we begin wed like to remind everyone that this call includes certain forward-looking statements within the eting of the private securities litation formact one thousandnine hundred five

Speaker Change: 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.

Speaker Change: these forward-looking statements speak only as of the date of this call and curry retail expressly disclaim any obligation are undertaking to demminate any updates or visions to any forward-looking statement contained herein

Speaker Change: 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 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 current. 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 or our earnings presentation, which Today, speaking on the earnings call, we have Curate Retail President and CEO, David Rollinson, Curate Retail Group CFO, Bill Wofford, and Curate Retail Executive Chairman, Gretna Fy. Now I'll hand the call over to David Rollinson.

Claire Adams: Please note that we have published slides to accompany the earnings release... On today's call, we'll discuss certain non-GAAP financial measures, including adjusted OIBDA, adjusted OIBDA margin, free cash flow, and constant currency. Information regarding the comparable GAAP metrics, along with required definitions and reconciliations, including preliminary 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. 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.

Speaker Change: please note that we have published slide two companyies the earnings release

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

Speaker Change: information regarding the comparable gaap metrics along with required definitions and reconciliations including to liminary note and schedulle one the two can be found in our earnings press release issueed today or our ranges presentation which are available on our websitite

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, Grant Messiaen. Now I'll hand the call over to David Rawlinson.

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

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 in 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 continued 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. 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.

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

David Rollinson: 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. However, 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.

Speaker Change: we delivered a solid quarter of earnings while revenue was in line with overall discretionary retail and a challenge macro of backdrop we expanded gross margin and grew adjusted or ebitda throughout continuing focus on cost and efficiency

Speaker Change: total company revenue declin which reflected lower volume particularly ac qic plates in corneronone 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.

Speaker Change: 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 Rollinson: 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 businesses. 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.

David Rawlinson: 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 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. 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.

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, 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 OEBDA of 5% and QVC International adjusted OEBDA of 8% in 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.

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

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 Rollinson: 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, business women, and activists, to be QBC 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.

David: 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 Farhill, Ken Corbell Apparel and Beauty, and Doris Dalton's Doll Tent.

David Rawlinson: 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 1 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 and Beauty, and Doris Dalton's Doll 10. One of our Age of Possibility quintessential 50 is Jennifer Dawson. We would like to just 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.

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 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, with collective demand for the existing 12 brands up low double digits after the campaign launch and particular strength from Valerie Parr-Hill.

Speaker Change: Kim Corbell Apparel and Beauty and Doris Dalton's doll tin.

Speaker Change: 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.

David Rollinson: 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.

David Rollinson: QVC will be the exclusive retail partner and the exclusive broadcast partner of USA Pickleball for its golden ticket events as well as this national championship tournament each November. QVC will broadcast the tournaments live on QVC Plus, 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, the QXH 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 stabilization of our fall.

David: 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, 50,000 attendees, and 2.6 million television viewers for its 2023 national championship.

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.

David Rawlinson: 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 Plus, 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. 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.

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: QVC will be the exclusive retail partner and the exclusive broadcast partner of USA Pickleball for its golden ticket events as well as this national championship tournament each November. QVC will broadcast the tournaments live on QVC Plus, create unique behind-the-scenes content, and curate products in partnership with USA Pickleball. 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: QVC will be the exclusive retail partner and exclusive broadcast partner.

Speaker Change: of USA Tickleball 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 Tickleball.

Speaker Change: now moving on to cic lates customers and merchandise

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

Speaker Change: 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.

David Rollinson: 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 30 June. 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 30 June, they bought 76 items and spent $3,950 on average, up 3% and 6% year-on-year, respectively. We had modest growth in new customers in Q2, marking the fourth consecutive quarter of new customer growth.

Speaker Change: this continues to show stabilization of our ballb

Speaker Change: our existing customers continue to purchase at healthy levels spending on average one thousand six hundred and sixty five dollars in 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 file was also up in the quarter.

Speaker Change: At QVC, our best customers, those who buy 20 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 Rollinson: We had modest growth in new customers in the second quarter, 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, the demand group is innovative kits and electrics, such as ninja wood-buyer grills and ice cream and ice makers. We also saw strength and cookware from our celebrity chefs, Carla Hall, Wolfgang Puck, and Curtis Stone.

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 phases, the number of new customers increased 7%.

David Rawlinson: On a trailing twelve-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, neck bands, and new launches from Dr. Gundry and OMI in supplements. Skechers, Rykä, and Revitalign sold well in footwear. 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 Christie Brinkley, Katy Perry's shoe line, and our 30th anniversary collection with Diane Gilman.

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

Speaker Change: From a merchandise perspective,

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

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

David: In electronics and home, we saw strength in functional products, such as portable power from EcoFlow, e-bikes, neck bands, 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 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 grass.

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 and fashion

Speaker Change: these included brands from our new q fifty brand ambassadors as well as new appaarel launches from christine brinkley katie payry shoean and our thirtieth niversary collection with ding gilman

David Rawlinson: 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+, 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. Revenue performance was led by QVC UK and Japan, up mid and low single digits, respectively.

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 Rollinson: QXH produced the best adjusted orbit on 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 oil to that margin was driven by gross margin expansion and favorable administrative expense. Bill will provide more details on our adjusted or denied expansion momentarily.

David: QXH produced its best-adjusted OEBDOM 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: to xsa produced its best adjusted orof bit on margin rate in the past they porters

Speaker Change: even with investment in the age of possibility campaign to better serve the attractive demographic of women fifty plus as well as the deleveraging of fixed cost due to lower volume

Speaker Change: adjusted oed out margin was driven by gross margin expansion and favorable administrative expenses

Speaker Change: Bill will provide more details on our Adjusted Audit I Expansion momentarily.

David: 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, 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 OEBDOT 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.

David Rollinson: 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, 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 OEBDOT 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.

Speaker Change: tbc international delivered another very solid quarter we reported stable revenue and adjusted orida growth for the fourth consecutive quarter revenue performance was led by qv c u k in japan of mid and low single digits respectively

David Rawlinson: 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%. Our streaming business is seeing strong momentum.

Speaker Change: both countries sawof sales growth in most categories with the uk seeing particular strength in beauty jewelry accessories and hun

Speaker Change: in japan being strength in jewelry electronics in apparel

Speaker Change: cbc's international adjusted orbita growth was driven by strong product margin expansion and cost control partially offset by fulfillment pressure from higher b volume wages and carrier rates

Speaker Change: 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.

David Rollinson: 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 OIDA dot decline. Now looking at programming, total minutes viewed on our five channels were 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.

David: 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 were down one percent 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.

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

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

Speaker Change: including streaming, total viewership was up 1%.

David Rawlinson: 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. 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, given continued macro challenges, and with the election and the Olympics competing for airtime.

Speaker Change: 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 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 attracts viewers across generations, with more than 80% of viewers, 49 are younger.

David: 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.

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.

Speaker Change: and 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.

David Rollinson: 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.

David: 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.

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 Serhal as the new Chief Merchandise Officer of QVC US. 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 developing 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: 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: We're also pleased to announce that we have hired Mara Serhal as the new Chief Merchandise Officer of QVC-US.

Speaker Change: Mara replaces Stacey Bowe, who was appointed President of HSN in February .

David Rollinson: 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.

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

David Rollinson: We're excited to welcome her to this key leadership role in our largest business. In conclusion, we delivered another solid quarter of earnings. Maintaining revenue consistent with the overall discretionary market, generating gross margin expansion and adjusted or dog 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.

David: 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 OEBDA 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.

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

Speaker Change: in conclusion

Speaker Change: We delivered another solid quarter of earnings.

Speaker Change: Sustaining revenue consistent with the overall discretionary market.

Speaker Change: Generating Gross Margin Expansion.

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.

Speaker Change: and Adjusted Orbital Growth.

Speaker Change: 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.

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

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

Bill Wafford: 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. 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 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.

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.

Bill: 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.

Bill Wofford: 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 qx h

Bill Wofford: Revenue declined 4% due to lower unit volume and shipping and handling revenue partially offset by higher average selling price.

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

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

Speaker Change: bd declinine nine percent of reflecting lower demand for ath and body accessories declined five percent due to lower demand for loungejord handbags the electronics declined eleven percent due to softness and computers and smart he

Bill Wafford: Electronics declined 11% due to softness in computers and smart home. Jewelry grew 12%, reflecting successful Firelight Lab Grown Diamonds and a Today's Special Value for 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.

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.

Bill: 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. 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. Marketing expenses increased due to the launch of QVC's Age of Possibility campaign in April and associated brand marketing, while administrative expenses declined as we incurred Project Athens-related costs in the prior year period.

Bill Wofford: jewelrygrew twelve percent reflecting successful firelight lab grown diamonds and a today's special value for tr fine silver

Speaker Change: Adjusted OEBDA margin increased 110 basis points, driven by continued gross margin gains.

Bill Wofford: 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.

Bill Wofford: fulfillment expenses improved 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.

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

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

Bill Wafford: Administrative expenses declined as we comped Project Athens-related costs in the prior year period. 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 led our performance at 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.

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

Bill: 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.

Bill Wofford: we continue to be disciplined in our cost management to sustain adjusted obitda margting gains while investing in future growth

Bill Wofford: 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. Revenue was flat, reflecting a 4% increase in unit shipped, offset by a 3% lower average selling price and unfavorable return. UK and Japan, letter performance, were mid and low single digits, respectively.

Bill Wofford: 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.

Bill: Moving to QVC International, my comments focus on constant currency. Revenue was flat, reflecting a 4% increase in unit shipped, offset by a 3% lower average selling price and unfavorable return. UK and Japan, letter performance, were mid and low single digits, respectively.

Speaker Change: Moving to QVC International. My comments focus on constant currency results.

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

Bill Wofford: bc uk and japan letter performance mid and low single digits respectively

Bill Wofford: Germany, the client, loads him in. From a category perspective, QVC International experienced constant currency growth in jewelry, beauty, and electronics, with a decline in homes. Adjusted OEBDA increased 8%, and Adjusted OEBDA 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 freight rates, reflecting inflationary pressure. SG&A was favorable primarily due to lower marketing and outside service. Moving to Cornerstone, revenue declined 14% as we experienced soft demand across our home brands due to challenges in the macro environment.

Bill: Germany declined low to mid. From a category perspective, QVC International experienced constant currency growth in jewelry, beauty, and electronics, with a decline in home. 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 freight rates, reflecting inflationary pressure. SG&A was favorable primarily due to lower marketing and outside service.

Bill Wofford: germany decline load miding digits

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

Bill Wafford: Adjusted OIBDA increased 8%, and adjusted OIBDA margin expanded 75 basis points. 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, 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 net adjusted OIBDA decreasing $6 million compared to last year. Turning to cash flow and the balance sheet.

Bill Wofford: adjusted ebitda increased eight percent and adjusted ebita margin expanded seventy-five basis points

Bill Wofford: gross margin increased ten basis points driven by increased initial margins due to a mix shift to highermargin products and favorable ofvender negotiations

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

Bill Wofford: SG&A was favorable primarily due to

Bill: Moving to Cornerstone, revenue declined 14% as we experienced soft demand across our home brands due to challenges in the macro environment. 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. 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: Moving to Cornerstone.

Bill Wofford: revenue decline fourteen percent 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 MSG&A, resulting in an adjusted orbit of -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 Mountain.

Speaker Change: 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 OIB at a decreasing $6 million compared to last year.

Bill Wafford: 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. In Q2 2023, we received $280 million in insurance proceeds related to the Rocky Mountains 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 expenditures. Looking at our debt profile. As of 30 June 2024, net debt was $4.7 billion, down $179 million from 31 March 2024.

Speaker Change: Turning the Cash Flow in the Balance Sheet.

Speaker Change: 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.

Speaker Change: 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 for renewals of our TV distribution contracts and $94 million on capital expenditures. Looking at our debt profile, as of June 30th, 2024, net debt was $4.7 billion, down $179 million from March 31st. 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.

Speaker Change: 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.

Bill: Looking at our debt profile, as of June 30th, 2024, net debt was $4.7 billion, down $179 million from March 31st. 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. 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.

Speaker Change: Looking at our debt profile, as of June 30th, 2024, net debt was $4.7 billion, down $179 million from March 31st.

Bill Wafford: 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. 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 Inactive, 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.

Bill: 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: 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.

Speaker Change: in terms of cash balances k retail had total cash of one point two billion dollars of which three hundred and fifteen million was a qvc ink

Bill: one hundred and sixteen million with a cornerstone four hundred and seventy million was at liberty and active l lc and three hundred and nine million was a curate retail link

Bill: 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.

Bill: Please note that Covenant Oivida includes the adjusted oivida of QVC ink and cornerstone, and a portion of projected cost savings. QVC Leverage Ratio increased from March 31st primarily due to certain adbacks 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.

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: The QVC Leverage Ratio increased from March 31st primarily due to certain adbacks 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 Wafford: QVC's leverage ratio increased from March 31, primarily due to certain add backs no longer impacting the calculation. Finally, on an administrative note, on June 10, 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 mean the stock-- this 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.

Speaker Change: QVC leverage ratio increased from March 31st primarily due to certain add-backs no longer impacting the calculation.

Speaker Change: 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.

Bill: as in the past this notice begins the period of one hundred and eighty calendar days to regain compliance which means the stock means the stock needs to have a closing bid of one dollar or more for ten 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 fifth consecutive quarter of gross margin expansion and the fourth consecutive quarter of adjusted OEBDA 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: 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 OEBDA 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.

Speaker Change: While there may be an additional grace period we could be eligible for, we remain focused on sustaining improved execution and financial performance.

Bill Wafford: 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.

Speaker Change: q two was the fifth consecutivequarter ofgross marin expansion in the fourth consecutive quarter of adjusted overbit to growth

David Rawlinson: ... 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.

Speaker Change: we affirmed that our debt level is manageable and our current cushion is efficient in relation to the four point five times maximum net leverage covenant threshold stipulated in our credit facility

Greg Maffei: Thanks, Bill. As you just heard, it's another solid quarter in a difficult macro environment. Great to see continued gross margin expansion and adjusted order 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, and you heard about reducing the revolver balance by $70 million, Adjusted OIBDA improvement, and net debt paydown, improving leverage, and 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. And with that, operator, we'll open the line for questions.

Speaker Change: Now I'll turn the call over to Greg.

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

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

Speaker Change: thanks bill

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

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

Greg: The QRA team is focused on execution and making progress on new and creative initiatives like streaming in the age of possibility.

Speaker Change: We're also paying close attention to the balance sheet.

Greg: You heard about reducing the revolver balance by $70 million, adjusted audit improvement and net debt pay down, improving leverage, and we will continue to assess incremental opportunities to improve the balance sheet.

Operator: We will continue to assess incremental opportunities to improve the balance. Our Annual Investor Day will be Thursday, November 14th in New York. Please save the date. 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...

Greg: We will continue to assess incremental opportunities to improve the balance. 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.

Speaker Change: Our Annual Investor Day will be Thursday, November 14th in New York. Please save the date. Additional details will be 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 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 pulls. 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 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 Matterton with Jeffrey's Company. Please go ahead.

Speaker Change: Thank you.

Speaker Change: ladies and gentlemen we will now be conducting a question and answer session

Speaker Change: if you would like to ask a question please press star one on a telephone key

Operator: 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 Matteson with Jeffrey's Company. Please go ahead.

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

Operator: you may press star 2 if you would like to remove your question from the queue

Speaker Change: 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

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

Karu Matterton: 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?

Karru Martinson: Good morning. Trying to get a little bit of insight onto the consumer. I mean, certainly understanding that, you know, they're pulling back on discretionary, 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?

Karu Matteson: Good morning.

Karu Matteson: 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.

Karu Matteson: 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?

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

Speaker Change: and what's the health the consumer that you guys see out there

David Rollinson: 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 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, unemployment rate ticking up, continued pressure on housing. Obviously, a lot of things going on in the external environment, elections around the world, the Olympics, other things that could affect consumer sentiment. 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 a customer is excited, there's not necessarily massive price sensitivity.

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

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

Speaker Change: variable interest rates environments and the fact that has on spending an unemployment rate ticking up continued pressure on

Speaker Change: continued pressure on housing obvious so obviously a lot of things going on in the external environment elections around the world the lympics of other things that could affect consummer sentiment i would say the biggest things we're seeing from our

David: Our consumer is 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 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.

David: otherter consumer are continued

Speaker Change: being very choiceful that's not quite the same as the pocket book being closed

David: But it does mean that you have to really excite. When a customer is excited,

David Rollinson: 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.

David Rawlinson: We're continuing to be able to sell at volume, high-priced, electric bikes at times, high-priced, jewelry at times. And so, 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, 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 sale price. So I don't see the, so far, the bottom falling out of the consumer.

David: 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 bikes.

Speaker Change: jewelry at h

David: and so but on the margin

Karu Matteson: The willingness to make purchases where she's not extremely excited by the value, I would say is softer than it has been.

David: 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 and what I'm largely seeing across discretionary retail.

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

David: reasonable demand

David: 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 Rollinson: 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, and I would say that read-across is consistent for us and what I'm largely seeing across discretionary retail.

David: Maybe a touch more price sensitivity at things around our average sell price.

David: So, I don't see, so far, the bottom falling out of the consumer. I do see a consumer that looks to be...

David Rawlinson: 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.

David: 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: 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?

Karu Matteson: 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?

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

Karu Matteson: 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?

David Rollinson: 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 cost 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: 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 cost 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. But 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....

David: Yeah, it's mostly Project Aftons, but keep in mind Project Aftons.

David: operrates across a w variety of

David: a variable. So Project Atoms has...

David: 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: Some of Project Athens is going.

David: at fulfillment expenses.

David: 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.

David: 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.

David Rollinson: 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.

David: maximizing on a willing to spend basis from our customers so itwith's the combined to effort across things that are having the positive effect on margin and we still think we have some room to go on those initiatives

David Rawlinson: 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.

Karu Matterton: Okay, lastly, my standard question every time, you know, when you look at your capital structure, you know, how are you thinking about that going forward?

Karu Matteson: Okay, and 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. And just lastly, you know, my standard question every time, you know, when you look at your capital structure, you know, how are you thinking about that going forward?

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

David Rollinson: This is Ben Oren. Go ahead, David, sorry. No, go ahead, Ben. Go ahead.

Ben Oren: This is Ben Oren. Go ahead, David. Sorry. No, go ahead, Ben.

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

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

Ben Oren: so

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

David Rawlinson: 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, 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 the 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 improved 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.

William Reuter: I think our, 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, 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 gonna use Free Cash Flow in the interim to continue to reduce debt.

Ben Oren: I think our, 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, 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 gonna use Free Cash Flow in the interim to continue to reduce debt.

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

Operator: Thank you very much; I appreciate it.

Karu Matterton: Thank you very much; I appreciate it.

Operator: 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.

Operator: and then going forward, debt that's due in 26, 27, and 28 as the business continues to deliver metric improvement and the markets continue to be improved for us.

Operator: 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.

Karru Martinson: Thank you very much. Appreciate it.

Operator: Thank you very much, appreciate it.

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

Carla Casella: 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 Rollinson: 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 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: high great things are take king the question i wonder if you could give us any color in terms of sequential performance through the quarter or any kind of an exit rate what you're seeing going into t c you're seeing any change in key trendds

David Rollinson: 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. These can have relatively temporary effects on viewership, so we're managing through those events.

David: I wouldn't point out big changes and 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 international market political events going on in those markets, those can have relatively temporary effects on viewership. So we're managing through those

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 elections, the Olympics, some in 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.

David: Yeah, I wouldn't point out big changes and key trends other than to say, you know, our viewership

David: participates in the larger what you might call a viewership economy. So when you're going through something like the election...

David: a big event like the attempted

David: assassination, vice-presidential selections.

David: think the olympics some of the and the international markets politically then going on in those markets

David: those can have relatively temporary effects on

David: viewership so we're we're managing through those events and then I think

David: 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.

David Rollinson: 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.

David: I think the general macro consumer is behaving about as you would expect if you read across.

David: 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.

David Rollinson: 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 customers?

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 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 have commented about the average spend per customer on kind of like an existing customer for 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 kind of core customer?

David Rollinson: 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: 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 is 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-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.

David Rollinson: 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 off 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. That's up 6% year-on-year. Okay, that's great, and then

David: 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. Okay, that's great, and then

David: <unk> spend was $1665 that's up 8%.

David: Year on year.

David: The other thing we are encouraged by for existing customers, we saw retention tick up a bit year on year and therefore, our best customers.

David: Best customers purchased on average 76 items over the last 12 months, that's up 3% year on year and they spent on average $3950 and that's up 6% year on year.

David Rawlinson: That's up 3% year-over-year, and they spent on average $3,950, and that's up 6% year-over-year.

Carla Casella: 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 in the 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?

Speaker Change: Okay. That's great and then one more e-commerce was up nicely as a percentage for both U S and international.

Speaker Change: Just wondering is the e-commerce business similar in terms of.

Speaker Change: Profitability in the core business.

Bill Wafford: Yeah, I mean, Carla, I would think directly, 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 coming off a television as well.

Carlo: Yes, I mean Carlo everything Directionally, if you think about theyre, both direct and direct to consumer businesses on the fulfillment side.

David Rollinson: Direct-to-consumer businesses on the fulfillment side. Potentially, depending on product mix on what's there, you could see a little bit of a different margin structure. But by and large, the economics of those, they're the same as when you think about something coming off of television as well. Okay, great.

David: 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 of a different margin structure, but by and large, the economics of those are the same as, you know, when you think about something that's coming off of television as well. Okay, great.

David: Potentially depending on product mix on what's there you could see a little bit little bit a different margin structure, but by and large the economics of those that are the same as when you think about something that's coming off of television as well.

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

Operator: Okay, great. Thank you so much.

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

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

David Rawlinson: Thank you.

Speaker Change: Thank you.

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

Speaker Change: 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 behalf of Bill.

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

Rob: 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.

William Reuter: 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.

William Router: Hey, guys. Good morning. This is Rob on for Bill just one from us.

Rob: I appreciate you guys discussing project assets 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 disruptions in the Red Sea. Thank you.

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

David: We're continuing to see some disruption. I think in the U.S., we have relatively little exposure. 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% of our volume goes through the canal.

David Rawlinson: Sorry. Yeah. 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. 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, I wouldn't say it's been a huge impact on the business.

Speaker Change: Sorry, yes so.

Speaker Change: We're seeing continuing to see some disruption I think in the U S. We have relatively little exposure I think about 15% of our volume comes through the Suez Canal. So it hasnt been a big impact we've seen more impact in Europe.

David Rollinson: 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.

David: About 75% goes through the canal.

David: 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 had a huge impact on the business. What's actually been a little bit more impactful has been that, 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.

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 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 had a huge impact on the business. What's actually been a little bit more impactful has been that, 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.

David: We've.

David: <unk> been targeting vessels.

David: 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 and more buying time and vendor order lead times to help counteract that so I wouldn't say, it's been I Wouldnt say it is.

David: Ben.

David: Huge impact on the business whats actually been a little bit more impactful has been over the course of Q2, the availability of vessel capacity.

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

David: Has come in and Thats resulted in.

David: A shortage in the global Ocean vessel capacity, that's driving up rates, especially on the <unk>.

David Rollinson: That's driving up rates, especially on the spot market. 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.

David: That's driving up rates, especially on the spot market. 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.

David: The spot market and so.

David: Those rate increases were manageable and Q2, but we are anticipating more volatility on that.

David: Deliveries in container prices.

David: As we go into Q3, so that plus the potential labor negotiations with the East Coast Longshoreman are both things were paying a lot of attention to.

Rob: Very helpful. Thank you.

Operator: Very helpful. Thank you.

Karru Martinson: Very helpful. Thank you.

William Reuter: Very helpful. Thank you.

David: Very helpful. Thank you.

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

Speaker Change: Thank you.

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

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?

Hale Holden: Thank you I had two quick questions.

Hale Holden: The first one is the cash you disclosed the cornerstone.

Speaker Change: Is that a new disclosure.

Hale Holden: All of it in the past or is that sort of the cash that's been there in the last couple of quarters.

Hale Holden: Yeah.

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

David: District, making sure that we were being comprehensive in the disclosure when we were talking about the cash of the various entities is all.

unknown: 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 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. 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?

David: Okay.

David: And then my second question is just a follow up on the shipping question.

Hale Holden: Have you seen any of your.

Speaker Change: I guess really really specific.

Speaker Change: Pre carriers break your contract is.

Speaker Change: Pushing more on the spot or are they still holding.

Speaker Change: Earlier in the year contracted rates.

unknown: 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.

David: 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.

David Rawlinson: 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 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: Yes, I would say we operate in a combination of spot and contract rates right. So there has David talked about the pressure with the 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.

David: 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.

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.

Hale Holden: Got it. And then one, 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?

Speaker Change: 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 too.

Speaker Change: Help us understand what.

Hale Holden: You may or may not be able to do to mitigate tariffs.

Hale Holden: I guess, which would be the coin flips ami election.

unknown: 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.

David: So, we have since, um... 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.

David Rawlinson: 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 sorta 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 in 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.

Speaker Change: So we.

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

Speaker Change: We have since.

David: Really since the supply chain crisis try it too.

David: Create.

Speaker Change: Some diversity.

David: And our sources of supply.

David: Less than half of our assortment ends up being impacted by tariffs and even that have the tariff rate is sort of a.

David: Sort of mid teens.

David: We think we have.

David: A number of continued avenues available to us to diversify supply. So we don't we don't see.

David: Scenario.

David: Other.

David: And no matter, which way the election unfolds that creates.

David: Our level of difficulty around tariffs that are not manageable for us given where we are today.

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

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

Speaker Change: Great. Thank you so much I appreciate it.

unknown: 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, if not sooner.

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, if not sooner.

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

Speaker Change: Thank you operator, I think we're done and thank you to the listening audience for your interest in <unk>. We look forward to speaking with you next quarter if not sooner.

David Rawlinson: Great. Thank you.

Hale Holden: Great. Thank you.

Speaker Change: Great. Thank you.

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

Speaker Change: Thank you. This concludes today's teleconference. You may disconnect your lines at this time.

Operator: For your participation.

unknown: & Self- quality Self-reliance No words Thanks for listening Subscribe Like Share And Ontario Subscribe Like Share And Ontario Subscribe Like Share And Ontario Subscribe Like Share And Ontario Subscribe Like Share And Ontario Subscribe Like

unknown: Applying Rubio Monocoat Aluminum Foil Aqueous varnish Interlace your plants This video alone is boring, but watching you grow and protect is worthwhile.

Operator: Okay.

Operator: [music].

unknown: Yes.

unknown: [music].

unknown: Oh.

unknown: [music].

unknown: Hum.

unknown: Yes.

unknown: Okay.

unknown: Mhm.

unknown: [music].

unknown: Hmm.

unknown: [music].

unknown: Uh-huh.

unknown: Yes.

David Rollinson: In electronics and home, we saw strength and functional products such as portable power from eco-flow, e-bikes, neck fans, and new launches from Dr. Gandhi and OMI in subliminal. Skechers, Ryka, and Revitalon sold well in footwear. Celebrity and New Merchandise launches helped excite our customers and 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 grass.

unknown: [inaudible] way, O'er the way, [inaudible] O'er the way, O'er the way, [inaudible] [inaudible]

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