Greetings. Welcome to QVC Group's Second Quarter 2025 Earnings Call. It is now my pleasure to hand the call over to Jessica Donati.

Thank you, and good morning. Before we begin, we'd like to remind you 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 QVC Group and QVC with the SEC. These forward-looking statements speak only as of the date of this call, and QVC expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in QVC Group's expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is based. Please note that we have published slides to accompany the earnings release. On today's call, we will discuss certain non-GAAP financial measures, including adjusted OIBDA, adjusted OIBDA margin, free cash flow, and constant currency. Information regarding the comparable GAAP metrics, along with required definitions and reconciliations, including preliminary notes and schedules 1 and 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 QVC Group President and CEO, David Rawlinson; QVC Group CFO and CAO, Bill Wafford; and QVC Group Executive Chairman, Greg Maffei. Following today's presentation, we will address questions that were submitted in advance of the call. There will be no live Q&A session. Now I'll hand the call over to David Rawlinson.

Thank you, and good morning, everyone. We appreciate you joining us and your continued interest in QVC Group. Coming off a challenging Q1, we continue to manage through what has proven to be a difficult macro environment in Q2. Namely, we continue to experience declining linear TV viewership as well as ongoing volatility in consumer confidence. QxH minutes viewed declined 15% in the second quarter. Declining consumer confidence in the earlier part of the second quarter was primarily driven by international economic policies and geopolitical events. Our implementation of key initiatives to strengthen our capital structure for the long term remains ongoing. At the same time, we are acutely focused on moving the business forward and implementing our WIN strategy to drive the future of live social shopping. To this end, we continue to advance the number of cost-cutting efforts and accomplished various milestones this quarter. In late June, we successfully completed the transition of HSN's operations to Studio Park in Westchester, Pennsylvania, bringing our 5 U.S. TV channels across HSN and QVC under one roof. In total, we now feature 52 hours of linear content a day. This will not only generate cost reductions but is also a major milestone in our WIN growth strategy and a testament to the dedication of our team. With a single headquarters for QVC and HSN, we believe we are in a much stronger position to efficiently create content for multiple platforms. To keep our customers engaged through this transition, particularly for our avid and elite customers, HSN launched Hello HSN PA!, a month-long marketing campaign across all of our touch points. We brought our customers with us on this exciting journey through moving theme programming and deals, shout-outs in our top-rated shows, behind-the-scene social clips with our hosts, and much more. Hello HSN PA! culminated in a blowout housewarming party in late July. More than 130 customers joined our hosting guests in person at our new Studio H in Westchester, and we broadcast the party live to the entire HSN community. As HSN President, Stacy Bowe told customers in an open letter, HSN may have a new address, but the HSN they know and love isn't going anywhere. The fun is here to stay. We also welcomed 11 of our HSN hosts to Studio Park, and 3 others will commute to Pennsylvania for the remainder of the year. In addition, we continue to take strategic steps to diversify our sourcing and reduce our dependence on any single country and related tariff pressures. During our last call, we mentioned monitoring the tariff impact, being prudent about placing new orders, and canceling certain orders with high tariff countries, actively sourcing from new countries, negotiating with vendors to share any tariff impact, and potentially taking price action when necessary. In June, we launched Christmas in July, a large home decor event with items largely sourced from countries impacted by tariffs. Although the tariff rates vary, we do not see significant impact to demand for items with tariff price adjustments. Our longer-term strategy of sourcing diversification continues. And as we shared last quarter, we are still targeting that no single country will represent more than 1/3 of our sourced goods in the U.S. by the end of the year. As a reminder, at the end of 2024, we committed to finding an additional $100 million worth of OIBDA opportunities by examining all areas of spending across the company. In Q2, we saw the favorable impact of our organizational changes in our expenses. We also saw the benefits from our IT outsourcing initiatives, allowing us to reinvest in marketing and technology that drives our growth businesses. Also, we completed the operational move of HSN, including standing up a new content organization and merchandise function. Returning our company to growth continues to be difficult as certain macroeconomic challenges persist. It will take time to ramp up. However, we believe the current strategy we have in place, our WIN growth strategy, is the right one and is already delivering results. I'd like to walk through some of the wins we saw just this quarter and why we're excited for what is to come. Our social and streaming channels continue to grow, and we estimate that the percentage of QxH revenue that was attributable during Q2 through these platforms is approaching double digits. This is an increase from what we saw in Q1. Social and streaming revenue experienced over 30% growth versus Q2 2024. As we will discuss more fully below, Q2 experienced substantial growth in new social customers with well over 100,000 new customers finding us through TikTok shop alone. In streaming, we continue to expand content and distribution. QVC and HSN recently joined Philo, a popular live TV streaming service with approximately 1.3 million paid subscribers. This launch reflects our strategic initiative to drive live shopping content to everywhere customers are spending their time. We also recently launched an ad-supported version of QVC2 on several leading SaaS platforms. Additionally, season 2 of Busy This Week on streaming is off to a strong start. Season 2 reached over 1 million households, 80% of which were new. In fact, in Q2, streaming monthly active users grew over 80% to nearly 1.5 million users, and streaming minutes watched grew 25% in the quarter. Building off the strategic agreement we discussed last quarter with TikTok, we hosted our first TikTok Shop Super Brand Day, kicking off the second year of The Age of Possibility. Over 80 of our top affiliate creators joined us for the event, along with 40 of our Q50 ambassadors, including Hoda Kotb, Jennie Garth, Billie Jean King, and more. The event was our highest viewed and most engaged QVC-hosted live stream to date. We are integrating TikTok creators into customer events like QVC's Foodie Fest and are seeing the success of our push into the ever crucial streaming and social businesses. We now have 8.4 million followers across all of our social media accounts, a 700,000 increase from last quarter. And we've uploaded our full QVC catalog into Meta shop for a seamless shopping experience on Facebook and Instagram. Notwithstanding the successful accomplishments we achieved this past quarter, given QVC Group's unique business model, certain elements of the tougher macro environment continue to apply pressure on our business. Total revenue declined in Q2 by 9% in constant currency. QxH's revenue declined 11%. QVC International revenue declined 3% in constant currency, and Cornerstone revenue declined 8%. As a result of top line softness, consolidated adjusted OIBDA declined 19% in constant currency in the second quarter, an improvement from the first quarter, which was down 31% versus last year. While these results are not yet where we want them to be, we are working to remain agile as we navigate the current landscape. Drilling down on our capital structure, thanks to the hard work of everyone at QVC Group, over the past few years, we've made meaningful progress in reducing our net debt by over $1.5 billion since the end of 2021. Our goal is to create more flexibility for our transformation and put ourselves on the strongest and most sustainable path forward. Improving gross margins and aggressively managing costs also continue to be top of mind. As you can see on Slide 8 in our presentation, on a trailing 12-month basis, customer count declined on a sequential basis with a decrease of approximately 3% versus March 2025. Please note, this does not include any new customers purchasing through our TikTok shop. Existing customers continue to purchase at healthy levels, spending on average $1,622 and purchasing 31 items in the 12 months ended June 30. And at QVC, our best customers, who buy 20 or more items annually, also continue to purchase at very attractive levels. In the 12 months ending June 30, they bought 76 items and spent $3,990 on average, up approximately 1% versus last year. Total QxH customer count declined 12% in the quarter driven by a 10% decrease in existing customers, a 21% decrease in new, and a 16% decrease in reactivated customers. The decline in linear TV households continues to put pressure on our customer count year-over-year. Our traditional customer reporting does not include any new customers who purchase from our TikTok shop. We estimate that well over 100,000 new customers purchased through our TikTok shop in the second quarter. There are still many unknowns in this relatively immature business. We continue to grow our catalog and improve our technology, and we expect to have more robust customer-level analytics and reporting in the coming quarters. Notably, when we add the estimated new TikTok shop customers to traditional customer reporting, we saw the number of new customers grow substantially year-over-year and a halving of the rate of decline in the overall customer file. We believe this is a strong and early sign of success in our social strategy. When we look within our categories, we saw declines in all categories with the exception of electronics compared to last year. Although apparel was down, we experienced strength from several of our core apparel brands including Kim Gravel, Denim & Co., Diane Gilman, and LOGO by Lori Goldstein, and also saw success in accessories driven by handbags and luggage. The Christmas in July event we kicked off in June saw strong sales, with customers responding to our food offerings along with new items from favorite brands like Valerie Parr Hill, Bethlehem Lights, and Homeworks by Slatkin. Our home business was down 12%, but we saw success in our private label, Bath, home environment, and smart home categories. Tariffs were a factor in our inventory mix and impacted deliveries and product availability. Moving to QVC International, we saw revenue decline 3% in constant currency compared to prior quarters of broadly stable revenue performance. We continue to experience top line pressure in Japan, but revenue in our European markets was only down approximately 1%. Total customer count declined 4% in the quarter, driven by a 3% decrease in existing customers, a 5% decrease in new customers, and an 8% decrease in reactivated customers. Finally, for our Cornerstone brands, revenue declined 8% in the second quarter, an improvement from our first quarter results driven by our transformation efforts. To wrap up, while some of the uncertainty we experienced last quarter has persisted in Q2, we remain guided by our confidence in our business, strategy, and leadership. We continue to do what we do best: Creating an opportunity for shoppers to explore, dream, and connect. We've evolved with the changing consumer preferences towards newer channels and platforms like streaming, TikTok, and Facebook and are now beginning to see those efforts positively impact our business. We will continue to be a class leader here while also tightly managing costs in the balance sheet. Now I'll turn the call to Bill to review Q2 financial results for each of our businesses.

Thank you, David, and good morning, everyone. Unless otherwise noted, my comments compare financial performance for the 3 months ended June 30, 2025, to the same period in 2024. Starting with QxH. Revenue declined by 11% due to lower unit volume and less shipping and handling revenue, with a partial offset in favorable return rates and higher average selling price. From a category perspective, home revenue decreased 12%, driven by reduced demand in culinary and pressure in many of our Today's Special Value events. Apparel revenue decreased by 9%, consistent with what we experienced in Q1. Beauty revenue fell by 13% in Q2, although we did see wins in brands like bareMinerals, Elemis, and Tatcha. Accessories experienced another challenging quarter with a 15% decline, driven again by footwear and loungewear. Electronics grew 4%, driven by smart home, computers, audio, and gaming. The operating loss was primarily driven by a $2.4 billion non-cash impairment charge related to goodwill and trade names. Adjusted OIBDA margin contracted 165 basis points. Gross margin declined approximately 15 basis points with higher product margins and favorability in obsolescence, more than offset by fulfillment pressure and sales deleverage. Product margins increased by 50 basis points, driven by better return rates, partially offset by lower shipping and handling revenue and initial margin. Obsolescence favorability of 25 basis points is driven by the overlap of abnormally high balance in Q2 2024. Fulfillment expenses were unfavorable 90 basis points due to increased freight rates and sales deleverage. On an aggregate dollar basis, operating expenses decreased 13% and SG&A expenses were flat. Operating expenses decreased $16 million, largely driven by lower commissions. SG&A expenses were flat, driven by lower personnel costs, offset by higher marketing costs. SG&A was unfavorable by approximately 175 basis points due to sales deleverage. Moving to QVC International. My comments will focus on constant currency results. Revenue declined 3%, reflecting a 3% decrease in units shipped and a 2% decrease in average selling price, partially offset by a favorable returns rate. From a category perspective, QVC International experienced sales growth in apparel, while home and accessories categories were flat, and beauty, jewelry, and electronics declined. Germany's net revenue increased 1%, while Japan's revenue declined 7% and the U.K. declined 1%. Adjusted OIBDA decreased 8% and adjusted OIBDA margin declined 60 basis points. Gross margin decreased 40 basis points due to sales deleverage and fulfillment pressure, partially offset by product margin gains. Fulfillment pressure is due to higher variable wage rates in Europe. Product margin strength was due to a favorable returns rate, offset by initial margin pressure. Operating expenses were flat, and the margin was unfavorable due to sales deleverage. SG&A expenses decreased 2% due to lower personnel expenses. SG&A margin was unfavorable by approximately 10 basis points due to sales deleverage. Moving to Cornerstone. Revenue declined 8% in the quarter as we continue to experience soft demand for furniture and decor and from continued challenges in the home sector. Adjusted OIBDA margin decreased approximately 30 basis points driven by cost for outside services related to Cornerstone's transformation plan and sales deleverage, partially offset by product margin and fulfillment. Turning to cash flow and the balance sheet for the quarter. In the first half of 2025, free cash flow was a use of $156 million compared to a source of $164 million last year. The decrease in cash flow was primarily due to a reduction in cash provided by operations and higher payments for TV distribution rights. As a reminder, our TV distribution payments fluctuate year-over-year depending on renewal cycles. Looking at the QVC Group, Inc. debt profile. As of June 30, 2025, net debt was $4.7 billion, and the QVC Group revolver had $1.925 billion drawn. QVC Group had total cash of $897 million, of which $330 million was at QVC Inc., $200 million was at Liberty Interactive LLC, and $262 million was at QVC Group. Our leverage ratio as of June 30, 2025, as defined by the QVC revolving credit facility, was 3.9x, excluding Cornerstone, compared to our maximum covenant threshold of 4.5x. Please note that covenant OIBDA includes the adjusted OIBDA of QVC Inc. as Cornerstone was removed as a borrower under QVC's credit agreement as of April 1. In light of the numerous macroeconomic factors and current leverage levels, as we previously announced on May 23, 2025, the Board of Directors unanimously decided to suspend payment of our quarterly dividend for preferred stockholders. Additionally, to further increase our financial flexibility, we made the decision to borrow $975 million of the funds available on our revolving credit facility in July 2025. These decisions reflect the Board's focus on and commitment to taking the necessary steps to preserve cash and enhance long-term value for our business, customers, partners, and investors. As you heard from David, we are focused on taking the necessary steps to strengthen our capital structure. We are in the process of evaluating a range of proactive financial and strategic alternatives. This review is ongoing, and no decisions have been made at this stage. We will provide updates if and when there are material developments that warrant further communication. Finally, as we previously announced on May 16, 2025, our Board approved a 1-for-50 reverse stock split of the company's Series A common stock and Series B common stock. The reverse stock split was approved by stockholders at our Annual Meeting on May 12, 2025, and took effect after market closed on May 22, 2025. On May 27, the company elected to have QVCGB suspended from trading on the NASDAQ Capital Market, and QVCGB began quotation on the over-the-counter market on May 28. Finally, on June 9, 2025, we received notice that our Series A common stock had regained compliance with NASDAQ. And as a result, QVCGA and QVCGP stocks continue to trade on NASDAQ. Now I'll turn the call over to Greg.

Thank you, Bill. This was another challenging quarter for QVC Group, and we aren't where we want to be. We remain unable to offset the declines in linear in a challenging environment, but we were pleased to see the growth in social and streaming. As I said, and you heard it from above, we are making good progress in social and streaming, and we continue to lean in here. We are balancing execution and a cost focus with investing in these growth businesses. We are also working on our capital structure and our balance sheet, and we are proactively evaluating financial and strategic alternatives. We were pleased to regain compliance with NASDAQ. And with that, we'll address the questions we received prior to the call.

Thank you, Greg. As I mentioned before, we've received a number of questions submitted prior to the call. Our first question is for David and comes from Carla Casella at JPMorgan. David, can you share some trends in new customers versus reactivated customers versus core customers?

Yes. Thank you for the question. As I mentioned during the call, our traditional customer count does not include any new customers we have purchasing through TikTok shop. Our trailing 12-month customer count declined 3% versus Q1, and last year, our total customer count was down about 12%. But as I mentioned before, we know that over 100,000 new customers bought from us through our TikTok shop. Comparing that to Q2 2024, that would improve our new customer count to plus 7% versus the reported negative 21%. We expect that social will continue to help drive new and reactivated customers like we saw in Q2. A few other things I'd call out: We are seeing some stability in average customer spend. That customer spend is up 1% this quarter, and existing customer retention is also up, improving about 100 basis points versus last year.

Next question, also for you, David. Can you share the percentage of sales coming from the core business? And has that changed?

Sure. We estimate that social and streaming revenue is approaching low double digits as a percentage of QxH revenue. That obviously still leaves 90% of revenue in QxH driven by core linear and digital. However, our social and streaming businesses grew over 30% in Q2 versus last year and are now a larger percentage of QxH revenue than they were in the first quarter. So I would say less is coming out of our core, given just some of the trends that we are seeing there. And then with the significant growth in social and streaming, we would continue to expect to see a shift with increasingly more social and streaming revenue as a percentage of total revenue over time.

Great. And our final question is a 2-part question around tariffs. First, can you share the tariff impact expected for fiscal '25? And what are your top ways to mitigate tariffs? And then second follow-on, did you see any tariff impact in the second quarter? And are your vendors passing on increased tariff costs?

Great. A lot there. We're monitoring tariff impact. We're taking a lot of the steps that we've discussed. We're being prudent about placing new orders and canceling certain existing orders from high-tariff countries. We're managing sourcing. We're actively negotiating with vendors, and in some circumstances, we've implemented price changes. We're still working towards our target that no single country will represent more than 1/3 of our sourced goods in the U.S. by the end of the year. That is a big change from where we were, which is more than half of our goods coming from a single country, and so that's a major effort. We think that diversification will be a major source of stability going forward. However, we continue to see volatility. You've seen lots of changes even in the last few days. We saw the first real impact of tariffs in our Christmas in July event, which kicked off in June. We completed an inventory assessment for that. We limited some orders and buys, and then we also took some price actions on the things we were selling during the Christmas in July event. As I said, tariffs will continue to be fluid, and we continue to adjust in response to changes in rates, including to the most recent ones. But what was encouraging about the Christmas in July event is we did not see a big drop-off in demand in response to the price changes that we made in that event. And so it gives us some confidence about our ability to navigate and continue to navigate our way through some of the current tariff challenges. Lastly, our international business had minimal tariff impact. Our international business makes up over 25% of our revenue and is more insulated from some of the impacts of the tariffs. With that, I think that is all the questions. I want to thank you again for your interest in the QVC Group. I look forward to continuing to share our story and visit as we make more progress on this transformation. Thank you.

This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.