Qurate Retail Inc (NASDAQ:QRTEA) Q2 2019 Earnings Conference Call - Final Transcript

Aug 08, 2019 • 08:30 am ET

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Qurate Retail Inc (NASDAQ:QRTEA) Q2 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Welcome to the Qurate Retail 2019 Q2 Earnings Call. [Operator Instructions] Afterwards we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded August 8. I would now like to turn the conference over to Courtnee Chun, Chief Portfolio Officer and Senior Vice President of Investor Relations. Please go ahead.

Executive
Courtnee Chun

Good Morning. Before we begin, we'd like to remind everyone 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 form 10-K and 10-Q filed by our company and QVC with the SEC. These forward looking statements speak only as of the date of this call and Qurate Retail expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in Qurate Retail's expectations with regard thereto , or any change in events, conditions or circumstances on which any such statement is based.

On today's call, we will discuss certain non-GAAP financial measures, including adjusted OIBDA adjusted OIBDA margin and constant currency. Information regarding the comparable GAAP metrics along with required definitions and reconciliations including preliminary note and schedules one through three can be found in the earnings press release issued today, which is available on our website.

Today speaking on the call we have Qurate Retail, President and CEO, Mike George; Qurate Retail Group CFO, Jeff Davis; Executive Chairman, Greg Maffei.

Please note, we have also published slides to accompany the earnings release. These slides are also available on our website. Now, I'll hand the call over to Mike George.

Executive
Michael A. George

Thank you. Courtnee, and good morning everyone. We're making good progress against the priorities we outlined on our last call, our second quarter results were highlighted by improved performance at QxH and QVC International relative to the first quarter, including sequential net revenue and OIBDA margin improvement at QxH, and double-digit year-over-year OIBDA growth at QVC International in constant currency. These gains were partially offset by further performance deterioration at Zulily. We're working aggressively to address these issues at Zu, though we do anticipate that they will persist in the near term. We also improved free cash flow relative to Q1 due to disciplined inventory management and more favorable working capital timing. Additionally, we resumed our share buyback program purchasing nearly 12 million shares of stock for $153 million from May 1st to July 31st. While our Q2 results declined year-over-year, I am encouraged by the resiliency of our QxH business and our ability to generate high levels of OIBDA and free cash flow in a dynamic and highly competitive environment. Going forward, we remain focused on evolving the QVC and HSN brands, building on our collective strengths in the power of our model here in the U.S. and globally capturing our targeted synergies and stabilizing Zulily. I'll focus my comments on strategic