Liberty Interactive Corp. reported revenues, gross margins and adjusted OIBDA improved at Bodybuilding.com and Backcountry.com in the third quarter as the number of transactions increased and the average value of orders remained relatively stable.
The two business contributed to a 12 percent increase in revenue at Liberty’s Interactive’s seven Digital Commerce companies, where overall revenue reached $310 million in the third quarter ended Sept. 30 compared with the same quarter a year earlier.
In October, Liberty Interactive reassigned revenues from those businesses to its Liberty Venture Group tracking stock and renamed its Liberty Interactive Group QVC Group to provide more clarity to management and investors. The other Digital Commerce companies reassigned to Liberty Venture Group include CommerceHub, Evite, Provide Commerce and The Right
Start.
“Our Digital Commerce companies, now attributed to Liberty Ventures Group, posted seasonally solid results and have strong momentum going into the fourth quarter,” said Greg Maffei, Liberty Interactive President and CEO.
Provide Commerce experienced modest revenue growth due to softness in demand for its floral, food and other gift products and slightly lower average order values. CommerceHub, which provides drop shipping and other fulfillment services to online merchants, grew revenue 32 percent due to an equivalent percentage increase in transactions processed.
Adjusted OIBDA for the Digital Commerce businesses improved by $3 million compared to the corresponding period in the prior year. Adjusted OIBDA losses were approximately 1 percent of revenue, compared with OIBDA losses of 2 percent in the same quarter of 2013. The 100 basis point improvement was primarily due to improved gross margins at Bodybuilding and Backcountry, cost savings initiatives and the revenue growth at CommerceHub.
Those improvements were partially offset by a $5 million reserve that was recorded on RedEnvelope inventory during the period in anticipation of winding down the business in early 2015 combined with $2 million of transaction costs associated with the pending sale of Provide Commerce’s floral and gifting businesses to FTD. Excluding these items, Provide was relatively flat and the other Digital Commerce businesses experienced increases in adjusted OIBDA.
