Qurate Retail Group reported a 15.2% increase in ecommerce revenue for the third quarter ended Sept. 30. Qurate, No. 9 in the 2020 Digital Commerce 360 Top 1000, generated 61.7% of its revenue from online channels or $2.08 billion, up from $1.81 billion or 58.7% of total revenue last year.
Ecommerce grew faster than other areas for the owner of QVC, HSN, Zulily and Cornerstone brands. Total revenue at Qurate increased 9.5% to $3.38 billion from $3.09 billion last year. However, ecommerce growth slowed down compared with last quarter, when it jumped 19.0% and made up nearly two-thirds of company revenue.
Unlike previous quarters, online-only Zulily increased its sales 10.2% year over year to $395.0 million in Q3 from $359.0 million. Thanks to more consumers shopping online during the pandemic and diversified marketing efforts, it did this while cutting customer acquisition costs in half, chief financial officer Jeffrey Davis said on a call with investors transcribed by Seeking Alpha. Qurate did not outline the specific marketing changes at Zulily that allowed for the 50% reduction.
Overall, Qurate’s increased ecommerce revenue has helped bring down expenses, with gross margins increasing to 13.8% from 13.1%. That’s in part because ecommerce orders have fewer returns than orders through other its channels, such as TV, and it had fewer promotions during the quarter across all of its ecommerce sites, Davis said.
In other earnings news:
- Outdoor apparel brand Canada Goose (No. 143) grew global ecommerce revenue more than 10% year over year in its second fiscal quarter ended Sept. 27. It didn’t break out exact figures. Total sales shrank 33.7% to $194.8 million Canadian dollars (US$149.7 million) from $294.0 million Canadian dollars (US$226.0 million). Lower foot traffic at retail stores depressed the direct-to-consumer segment as a whole, with sales down 37.7% to $46.2 million Canadian dollars (US$35.5 million) from $74.2 million Canadian dollars (US$57.0 million). However, direct sales in China rose 30%, as the country’s pandemic response allowed for faster reopening of its five retail locations in the country.
- Activewear brand manufacturer Under Armour Inc. (No. 88) grew direct-to-consumer revenue 17% to $540 million, but didn’t provide any more precise figures. Wholesale revenue decreased 7% to $830 million. Total sales remained flat at $1.433 billion for the second quarter Sept. 30, 0.2% over the $1.429 billion the prior year. The retailer is selling its MyFitnessPal connected fitness service to Francisco Partners in a transaction valued at $345 million, but Under Armour is keeping it’s MapMyFitness platform. Revenue from the connected fitness segment shrank 6.2% during the quarter to $36.9 million from $39.3 million. Connected fitness revenue is nearly all attributable to MyFitnessPal, according to chief financial officer Dave Bergman on a call with investors transcribed by Seeking Alpha. On the call, CEO Patrik Frisk said the users of MyFitnessPal didn’t match the target consumers at Under Armour, while MapMyFitness users more closely aligned with its “focus performers” customer segment that it believes will lead to more revenue growth in the future both through the app itself and through sales to its users.
- At luxury consignment retailer The RealReal Inc. (No. 695), gross merchandise value shrank 7.0% to $64.4 million for the third quarter ended Sept. 30, down from $69.2 million the prior year. Total revenue is down 4.2% to $78.1 million from $81.5 million thanks to an 11.2% increase in direct revenue to $13.6 million from $12.3 million. The retailer noted that consumers staying home has likely had a negative impact on sales, but point to a 16% quarter-over-quarter increase in total revenue as a sign that consumers continue to be interested in luxury items. The RealReal’s network of stores also may be helping it recover, as it reported an increase in consignment items being brought to its locations as they reopened. Because of this, the retailer is investing more heavily in marketing its stores and expanding its store footprint. The RealReal is No. 36 in the ranking of Digital Commerce 360 Top 100 Online Marketplaces.
Percentage changes may not align exactly with dollar figures due to rounding.
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