Liberty Interactive Corporation ("Liberty Interactive") (Nasdaq: QVCA, QVCB, LVNTA, LVNTB) today reported fourth quarter and year end 2016 results. Highlights include (1):

Attributed to QVC Group
  • Consolidated QVC revenue down 1% to $8.7 billion in 2016
  • QVC International revenue in local currency increased in all markets in the fourth quarter
    • QVC International revenue grew 3% on a constant currency (2) basis
  • QVC consolidated mobile penetration was 58% of orders in 2016, a 795 basis point increase
    • QVC US mobile penetration was 57% of orders, an 820 basis point increase
  • zulily revenue grew 14% to $1.5 billion (3) and operating loss was $152 million in 2016, driven by approximately $223 million of amortization of intangible assets primarily related to purchase accounting from the acquisition
    • zulily adjusted OIBDA (4) grew 58% to $112 million (3)
  • From November 1, 2016 through January 31, 2017, repurchased 12.5 million QVCA shares at an average price per share of $20.37 and a total cost of $255 million

"Internationally, QVC continues to perform well, while domestically we are focusing on strengthening a few merchandise categories that have been weak," said Greg Maffei, Liberty Interactive President and CEO. "zulily finished the year strong and we took advantage of the stock pullback to repurchase $255 million of QVCA shares."

Unless otherwise noted, the following discussion compares financial information for the thee months and year ended December 31, 2016 to the same period in 2015.

QVC GROUP - For the quarter, QVC Group's revenue decreased 3% to $3.1 billion, operating income was roughly flat at $384 million, adjusted OIBDA (4) decreased 2% to $610 million, net income decreased 16% to $188 million and adjusted net income (5) decreased 15% to $266 million. For the full year, QVC Group's revenue increased 11% to $10.2 billion, operating income decreased 14% to $1.0 billion, adjusted OIBDA increased 3% to $1.9 billion, net income decreased 26% to $473 million and adjusted net income decreased 8% to $812 million. Approximately $39 million of corporate level selling, general and administrative expense ("SG&A") (including stock-based compensation expense) was allocated to QVC Group for the full year 2016. QVC Group's reported GAAP results include the zulily acquisition beginning in the fourth quarter of 2015 (see the "zulily" section below for a further discussion of the impact of the acquisition).


"Our international segment generated strong results in the quarter with broad-based sales gains and margin expansion," said QVC president and CEO Mike George. "The sales trend in our US business persisted from the third quarter primarily due to continued headwinds in select categories. We have strong action plans in place and are confident in our ability to return the US business to growth."

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