Shares of Liberty Interactive (NASDAQ:QVCA) fell as much as 13.6% on Tuesday morning, hamstrung by a disappointing fourth-quarter report. Share prices stabilized, then recovered to finish the day closer to a 7% drop. Shares in the vote-boosted Series B stock (NASDAQ:QVCB), which carries ten votes per share as opposed to QVCA's single vote per share, fell as much as 16.9%.
Sales decreased 3% year over year, landing at $3.1 billion. Adjusted earnings fell 8% to $0.57 per diluted share. The core operations under the QVC US banner saw operating income plunging 15% lower on 7% lower revenues, while the smaller QVC International segment held steady, and the tiny e-commerce platform Zulily doubled its operating income on 10% higher sales.
Here, like everywhere else, many consumers are giving up traditional retail channels in favor of online shopping experiences. Infomercial-style TV channels QVC and the Home Shopping Network -- both under the Liberty Interactive umbrella -- are old hat, and it shows in these financial results.
Liberty Interactive might want to double down on more e-commerce platforms in the Zulily format, or perhaps lean into better online shopping tools for the HSN and QVC brands. Meanwhile, investors are probably better served by e-tailers born and bred in a modern, efficient business model with low capital costs.
The writing is on the wall.