HSN, Inc. (NASDAQ:HSNI) Q4 2015 Earnings Conference Call - Final Transcript
Feb 24, 2016 • 09:00 am ET
Ladies and gentlemen, good morning and welcome to the HSN Inc. Fourth Quarter and Full Year 2015 Earnings Call and Webcast. This call is being recorded. Following the conclusion of today's discussion, the HSNi team will be taking your questions.
With that, I'd now like to turn the call over to Felise Glantz Kissell, Vice President of Investor Relations. Ms. Kissell, please go ahead.
Felise Glantz Kissell
Good morning, everyone, and thank you for joining us. On this morning's call, we have Mindy Grossman, Chief Executive Officer of HSNi; and Judy Schmeling, Chief Operating Officer and Chief Financial Officer. Judy will first review our financial performance, Mindy will then strategically discuss the business.
As always, some of those statements made on this call may be forward-looking and as such, are subject to many factors that could cause actual results to differ materially from expectations reflected in the forward-looking statements. Additional information regarding these factors, as well as various risks and uncertainties can be found in HSNi's earnings release filed with the US Securities and Exchange Commission and available on the company's website.
HSNi does not undertake to publicly update or revise any forward-looking statements. Also, on today's call, there will be references to certain non-GAAP financial measures. These are described in more detail in the company's earnings release and SEC filings available on the HSNi website. You are encouraged to refer to the press release and SEC filings and to review the reconciliation of these non-GAAP financial measures to the most directly comparable GAAP results.
With that, I would now turn the call over to Judy Schmeling, HSNi's COO and CFO. Judy?
Thank you, Felise. And good morning, everyone. As we reviewed on the last earnings call, our fourth quarter results would be impacted by heightened promotional activity in the marketplace, the performance of certain brands and merchandising categories and the tough comps from the prior year.
At HSNi, these factors resulted in sales down 2% with digital sales up 1%, comping 10% sales growth and 12% digital sales growth in the prior year. Adjusted EBITDA decreased of 3% due to Cornerstone's performance and adjusted earnings per share of $1.15 compared to $1.22 a year ago.
Our strategic priority is positioning HSNi for long-term growth through a balanced approach of driving sales and gross profit while intensely managing operating expenses given the current retail environment. At HSN, sales decreased 2% to $779 million, with digital sales increasing 1%. Sales increased in electronics, wellness and home, offset by decreases in categories, such as jewelry and culinary.
Our improvement in home was driven by the wholesale expansion of our Ingenious Designs business associated with the Joy Mangano brand into other retail outlets. While we continued to air our direct-response television marketing campaign featuring Keith Urban in the fourth quarter, a business we viewed as opportunistic, sales were down from the prior year. The incremental sales from our expanded wholesale distribution that I just mentioned, offset by lower demand in our direct-response business represented a benefit of