Liberty Interactive Corp (NASDAQ:LVNTA) Q1 2019 Earnings Conference Call - Final Transcript
May 10, 2019 • 08:30 am ET
of price comparisons, ever growing levels of promotional intensity and the rise of digitally native brands and social influencers, all of which contribute the shortening product life cycles. And of course we're undergoing our own substantial change, acquiring HSN, creating the new integrated QXH business and aligning our teams, our resources and our strategies to meet both the challenges and the opportunities presented by this changing market landscape.
In particular, we're focused on two overarching priorities to evolve our business, in ways that build on our competitive strengths and our strong customer relationships. First, we must be the best at product curation and discovery. This has always been at the core of our success. And in today's world, we need to further increase product differentiation, expand variety, be faster to market with the new and the undiscovered, and strive for the best value, all while enhancing our delivery promise to meet customer's rising expectations. Second, we need to win in digital. We have evolved into one of the largest e-commerce and mobile commerce retailers in the US, and now we need to leverage that platform to grow digital faster, giving our customers the opportunity to buy what they want, when they want, creating new purchase occasions and attracting new generations of consumers.
Broadcast TV is an amazing platform to attract viewers, build relationships and inspire immediate purchases. Increasingly, we're also leveraging our networks, as a uniquely powerful marketing channel for driving consumers to our digital experiences. And we are also supplementing this broadcast marketing channel with online marketing channels, to drive non-TV viewers to digital. Once consumers get to our digital properties, we're working hard to deliver compelling, storytelling experiences and frictionless shopping.
Now on our last call, we talked about how these changes are impacting our P&L. Quite simply, some changes create pressure on adjusted OIBDA yield, including growing performance marketing, expanding our digital-only assortments, maintaining competitive offers in a more promotional environment, creating more original content for more broadcast and digital platforms, and incurring short-term cost to relocate fulfillment centers, as we enhance our service promise. We believe these pressures can be offset by acquisition synergies and other cost actions, along with continued reductions in TV commissions and customer service expenses and growth in proprietary products and other higher margin businesses.
We expect some mismatches in the timing of costs and benefits as we evolve the business. But we can flex many of these costs up and down based on the level of success we're seeing. Through all of these changes, our overarching financial goal remains to drive healthy growth in free cash flow for the long-term. We recognize that our quarterly results have been more volatile of late and we expect results to remain variable, as we navigate these changes. But we are managing the business with a balanced focus on top line growth and tight margin management, and we remain committed to investing in the future.
We will not chase unprofitable sales and then we will