QVC Group, Inc 10-Q for FY2023 Q3

QVC Group, Inc. (QVCAQ)

10-Q 2023-11-03 For: 2023-09-30

Added on April 10, 2026

About this 10-Q

QVC Group, Inc filed this 10-Q on November 3, 2023, covering the quarter ended September 30, 2023 (FY2023 Q3).

Headline figures

Quarter ended September 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $2.48B; down 9.7% from $2.74B a year earlier
Net income: $1M; compared with a net loss of $2.75B a year earlier
Diluted EPS: $0.00; compared with -$7.21 a year earlier

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incorporation or organization)	Identification No.)
State of Delaware (State or other jurisdiction of incorporation or organization)	84-1288730 (I.R.S. Employer Identification No.)

12300 Liberty Boulevard Englewood, Colorado (Address of principal executive offices)	80112 (Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Series A common stock	QRTEA	The Nasdaq Stock Market LLC
Series B common stock	QRTEB	The Nasdaq Stock Market LLC
8.0% Series A Cumulative Redeemable Preferred Stock	QRTEP	The Nasdaq Stock Market LLC


Large Accelerated Filer ☒	Accelerated Filer ☐	Non-accelerated Filer ☐	Smaller Reporting Company ☐	Emerging Growth Company ☐


Series A common stock		380,697,040
Series B common stock		8,700,380


PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
QURATE RETAIL, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (unaudited)		I-3
QURATE RETAIL, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (unaudited)		I-5
QURATE RETAIL, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Comprehensive Earnings (Loss) (unaudited)		I-6
QURATE RETAIL, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (unaudited)		I-7
QURATE RETAIL, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Equity (unaudited)		I-8
QURATE RETAIL, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (unaudited)		I-10
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		I-27
Item 3. Quantitative and Qualitative Disclosures about Market Risk.		I-42
Item 4. Controls and Procedures.		I-42

PART II—OTHER INFORMATION		II-1
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities		II-1
Item 5. Other Information		II-1
Item 6. Exhibits		II-2

SIGNATURES		II-3


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	September 30,		December 31,
	2023		2022

	amounts in millions
Assets
Current assets:
Cash and cash equivalents	$	1,099	1,275
Trade and other receivables, net of allowance for credit losses of $92 million and $111 million, respectively		952	1,394
Inventory, net		1,229	1,346
Indemnification agreement receivable		21	50
Other current assets		184	210
Total current assets		3,485	4,275
Property and equipment, net		506	570
Intangible assets not subject to amortization (note 5):
Goodwill		3,457	3,501
Trademarks		2,698	2,718
		6,155	6,219
Intangible assets subject to amortization, net (note 5)		567	612
Operating lease right-of-use assets		577	585
Other assets, at cost, net of accumulated amortization		147	310
Total assets	$	11,437	12,571


	Three months ended			Nine months ended
	September 30,			September 30,
	2023		2022	2023		2022

	amounts in millions, except per share amounts
Total revenue, net	$	2,479	2,744		7,772	8,580
Operating costs and expenses:
Cost of goods sold (exclusive of depreciation shown separately below)		1,603	1,905		5,146	5,885
Operating expense		186	205		573	599
Selling, general and administrative, including stock-based compensation (note 2)		415	464		1,359	1,370
Restructuring, penalties and fire related costs, net of (recoveries) (note 8)		19	(134)		(189)	(123)
Depreciation and amortization		105	107		309	371
Impairment of intangible assets (note 5)		—	3,081		—	3,081
Gains on sale of intangible asset and sale leaseback transactions (note 8)		—	(277)		(119)	(520)
		2,328	5,351		7,079	10,663
Operating income (loss)		151	(2,607)		693	(2,083)
Other income (expense):
Interest expense		(119)	(107)		(336)	(343)
Dividend and interest income		14	2		39	5
Realized and unrealized gains (losses) on financial instruments, net (note 4)		(15)	(8)		(95)	29
Loss on disposition of Zulily, net		—	—		(64)	—
Gain (loss) on extinguishment of debt		1	14		45	8
Tax sharing income (expense) with Liberty Broadband		(4)	36		(12)	78
Other, net		5	21		13	69
		(118)	(42)		(410)	(154)
Earnings (loss) before income taxes		33	(2,649)		283	(2,237)
Income tax (expense) benefit		(21)	(87)		(119)	(265)
Net earnings (loss)		12	(2,736)		164	(2,502)
Less net earnings (loss) attributable to the noncontrolling interests		11	11		36	41
Net earnings (loss) attributable to Qurate Retail, Inc. shareholders	$	1	(2,747)		128	(2,543)

Basic net earnings (loss) attributable to Series A and Series B Qurate Retail, Inc. shareholders per common share (note 3):	$	0.00	(7.21)		0.33	(6.69)
Diluted net earnings (loss) attributable to Series A and Series B Qurate Retail, Inc. shareholders per common share (note 3):	$	0.00	(7.21)		0.33	(6.69)



	Stockholders' Equity
						Accumulated
					Additional	other		Noncontrolling
	Preferred		Common stock		paid-in	comprehensive	Retained	interest in equity	Total
	stock		Series A	Series B	capital	earnings (loss)	earnings	of subsidiaries	equity

	amounts in millions
Balance at January 1, 2023	$	—	4	—	53	18	337	113	525
Net earnings (loss)		—	—	—	—	—	128	36	164
Other comprehensive earnings (loss)		—	—	—	—	10	—	(11)	(1)
Stock-based compensation		—	—	—	36	—	—	—	36
Distribution to noncontrolling interest		—	—	—	—	—	—	(35)	(35)
Withholding taxes on net share settlements of stock-based compensation		—	—	—	(1)	—	—	—	(1)
Other		—	—	—	2	—	3	—	5
Balance at September 30, 2023	$	—	4	—	90	28	468	103	693


	Nine months ended
	September 30, 2023
	RSUs Granted (000's)	Weighted Average GDFV

Qurate Retail Series A common stock, subsidiary employees (1)	1,980	$	0.91
Qurate Retail Series A common stock, Qurate Retail employees and directors (2)	680	$	1.40
Qurate Retail Series A common stock, Qurate Retail President and CEO (3)	1,869	$	1.51
Qurate Retail Series B common stock, Qurate Retail Chairman of the Board (4)	353	$	5.51



				Weighted		Aggregate
				average		intrinsic
	Series A			remaining		value
	(000's)	WAEP		life		(millions)
Options outstanding at January 1, 2023	32,914	$	8.78
Granted	—	$	—
Exercised	(14)	$	2.17
Forfeited/Cancelled	(8,572)	$	11.66
Options outstanding at September 30, 2023	24,328	$	7.76	2.7	years	$	—
Options exercisable at September 30, 2023	15,753	$	8.86	2.2	years	$	—


	Qurate Retail Common Stock
	Three months ended		Nine months ended
	September 30,		September 30,
	2023	2022	2023	2022

	number of shares in millions
Basic WASO	388	381	386	380
Potentially dilutive shares	1	1	1	3
Diluted WASO	389	382	387	383


					Corporate and
	QxH		QVC Int'l	CBI	Other	Total

	amounts in millions
Balance at January 1, 2023	$	2,693	778	12	18	3,501
Foreign currency translation adjustments		—	(26)	—	—	(26)
Disposition (1)		—	—	—	(18)	(18)
Balance at September 30, 2023	$	2,693	752	12	—	3,457


	Outstanding
	principal at		Carrying value
	September 30, 2023		September 30, 2023		December 31, 2022

	amounts in millions
Corporate level debentures
8.5% Senior Debentures due 2029	$	287		286	286
8.25% Senior Debentures due 2030		505		503	503
4% Exchangeable Senior Debentures due 2029		353		95	134
3.75% Exchangeable Senior Debentures due 2030		428		114	157
1.75% Exchangeable Senior Debentures due 2046		77		98	323
Subsidiary level notes and facilities
QVC 4.375% Senior Secured Notes due 2023		—		—	214
QVC 4.85% Senior Secured Notes due 2024		423		423	600
QVC 4.45% Senior Secured Notes due 2025		586		585	599
QVC 4.75% Senior Secured Notes due 2027		575		575	575
QVC 4.375% Senior Secured Notes due 2028		500		500	500
QVC 5.45% Senior Secured Notes due 2034		400		399	399
QVC 5.95% Senior Secured Notes due 2043		300		300	300
QVC 6.375% Senior Secured Notes due 2067		225		225	225
QVC 6.25% Senior Secured Notes due 2068		500		500	500
QVC Senior Secured Credit Facility		995		995	1,075
Deferred loan costs		—		(33)	(37)
Total consolidated Qurate Retail debt	$	6,154		5,565	6,353
Less current classification				(730)	(828)
Total long-term debt			$	4,835	5,525


	September 30,		December 31,
	2023		2022

	amounts in millions,
	except share amounts
Liabilities and Equity
Current liabilities:
Accounts payable	$	813	976
Accrued liabilities		804	1,133
Current portion of debt, $307 million and $614 million measured at fair value (note 6)		730	828
Other current liabilities		109	162
Total current liabilities		2,456	3,099
Long-term debt (note 6)		4,835	5,525
Deferred income tax liabilities		1,515	1,440
Preferred stock (note 7)		1,270	1,266
Operating lease liabilities		539	518
Other liabilities		129	198
Total liabilities		10,744	12,046
Equity
Stockholders' equity:
Series A common stock, $.01 par value. Authorized 4,000,000,000 shares; issued and outstanding 380,510,994 shares at September 30, 2023 and 374,390,323 shares at December 31, 2022		4	4
Series B common stock, $.01 par value. Authorized 150,000,000 shares; issued and outstanding 8,700,380 shares at September 30, 2023 and 8,373,512 shares at December 31, 2022		—	—
Series C common stock, $.01 par value. Authorized 4,000,000,000 shares; no shares issued		—	—
Additional paid-in capital		90	53
Accumulated other comprehensive earnings (loss), net of taxes		28	18
Retained earnings		468	337
Total stockholders' equity		590	412
Noncontrolling interests in equity of subsidiaries		103	113
Total equity		693	525
Commitments and contingencies (note 8)
Total liabilities and equity	$	11,437	12,571


Senior debentures	$	250
QVC senior secured notes	$	2,114


		Nine months ended
		September 30, 2023
			QxH	QVC Int'l	CBI	Corp and other	Total

	in millions
Home		$	1,868	701	735	76	3,380
Apparel			939	329	125	113	1,506
Beauty			745	417	—	14	1,176
Accessories			619	156	—	78	853
Electronics			316	48	—	2	366
Jewelry			218	118	—	11	347
Other revenue			131	6	—	7	144
Total Revenue		$	4,836	1,775	860	301	7,772


	Three months ended
	September 30, 2022
		QxH	QVC Int'l	CBI	Corp and other	Total

	in millions
Home	$	621	208	283	53	1,165
Apparel		330	100	44	79	553
Beauty		252	129	—	9	390
Accessories		190	49	—	47	286
Electronics		152	20	—	2	174
Jewelry		73	45	—	6	124
Other revenue		45	3	—	4	52
Total Revenue	$	1,663	554	327	200	2,744


	Three months ended September 30,			Nine months ended September 30,
		2023	2022		2023	2022

	amounts in millions
QxH	$	201	143		525	600
QVC International		77	62		226	261
CBI		11	10		40	85
Corporate and other		(4)	(30)		(57)	(79)
Consolidated Qurate Retail	$	285	185		734	867


	September 30, 2023
	Total assets		Capital expenditures

	amounts in millions
QxH	$	8,201	83
QVC International		1,800	33
CBI		524	3
Corporate and other		912	32
Consolidated Qurate Retail	$	11,437	151


	Cash and cash
	equivalents

	amounts in millions
QVC	$	279
CBI		43
Corporate		777
Total Qurate Retail	$	1,099


		Borrowing capacity
		amount in millions
Credit Facility	$	2,145


	Variable rate debt				Fixed rate debt
			Weighted				Weighted
	Principal		average		Principal		average
	amount		interest rate		amount		interest rate

	dollar amounts in millions
QVC	$	995	6.8	%	$	3,509	5.2	%
CBI	$	—	—	%	$	—	—	%
Corporate and other	$	—	—	%	$	1,650	5.9	%


31.1		Rule 13a-14(a)/15d-14(a) Certification*
31.2		Rule 13a-14(a)/15d-14(a) Certification*
32		Section 1350 Certification**
99.1		Reconciliation of Qurate Retail, Inc. Net Assets and Net Earnings to Liberty Interactive LLC Net Assets and Net Earnings**
101.INS		Inline XBRL Instance Document* - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document*
101.CAL		Inline XBRL Taxonomy Calculation Linkbase Document*
101.LAB		Inline XBRL Taxonomy Label Linkbase Document*
101.PRE		Inline XBRL Taxonomy Presentation Linkbase Document*
101.DEF		Inline XBRL Taxonomy Definition Document*
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*

	QURATE RETAIL, INC.
Date: November 3, 2023	By:	/s/ DAVID RAWLINSON II
		David Rawlinson II President and Chief Executive Officer
Date: November 3, 2023	By:	/s/ BRIAN J. WENDLING
		Brian J. Wendling Chief Accounting Officer and Principal Financial Officer


/s/ BRIAN J. WENDLING
Brian J. Wendling
Chief Accounting Officer and Principal Financial Officer



Qurate Retail Net Assets	$	693
Reconciling items:
Zulily, LLC ("Zulily") net assets (3)		—
Adjustment to reflect Cornerstone Brands, Inc. ("CBI") as an equity investment (1)		(175)
Preferred Stock liability (2)		1,270
Cash held by Qurate Retail		(328)
Other corporate net assets		16
Liberty LLC Net Assets	$	1,476

Qurate Retail Net Earnings	$	164
Reconciling items:
Zulily net (earnings) loss (3)		44
Adjustment to reflect CBI equity method share of (earnings) loss (1)		(11)
Preferred stock dividends		77
Loss on Zulily divestiture (3)		64
Other corporate (earnings) loss		6
Liberty LLC Net Earnings	$	344