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Why Qurate Retail Stock Plunged Today

By Evan Niu, CFA - Feb 26, 2020 at 1:19PM

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The retailer reported fourth-quarter earnings.

What happened

Shares of Qurate Retail (QRTEA -4.67%) have plunged today, down by 22% as of 12:20 p.m. EST, after the company reported Q4 earnings. The media and retail specialist, previously known as Liberty Interactive, said revenue and margins were under pressure during the quarter.

So what

Revenue declined 5% to $4.2 billion in Q4, which brought full-year sales to $13.5 billion. That translated into adjusted earnings per share of $0.68, which was slightly ahead of the $0.66 per share in adjusted profits that analysts were expecting. The core QxH segment saw revenue decline across all categories in the fourth quarter.

Two women selling makeup on TV

Image source: Qurate Retail.

"Our fourth quarter results were in line with full-year trends, notably we experienced pressure on revenue and margins from the investment in network optimization at QxH," CEO Mike George said in a statement. "Despite these challenges, we were encouraged with our ability to grow free cash flow in 2019 on an operating basis."

Now what

The retailer repurchased exchangeable bonds for $98 million while hedging its remaining exposure with total return swaps. Qurate has recently issued two tranches of secured notes: 4.75% notes due in 2027 and 6.25% notes due in 2068. The proceeds were used to repay outstanding borrowings from a credit facility and general corporate purposes.

"We are accelerating the execution of our strategic priorities as we work to return to profitable growth," George added. "We continue to lead the curation of special products at compelling values across multiple platforms, providing customers an important third way to shop."

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Qurate Retail, Inc. Stock Quote
Qurate Retail, Inc.
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