Backcountry,com Sees Demand Fall in First Quarter

Liberty Interactive said sales at its eCommerce businesses' reached $461 million during the first quarter, which was flat with a year earlier.

 

Winter storm Pax, which occurred around Valentine's Day, negatively affected operations at Provide Commerce's businesses, including causing delivery issues. This contributed to the revenue weakness in the quarter. Additionally, Backcountry.com and Bodybuilding.com experienced low first quarter demand for their products.

 

Adjusted operating income before depreciation and amortization (OIBDA) decreased 41 percent to $23 million. The decrease in adjusted OIBDA was due to increased technology and personnel costs at the subsidiaries to support anticipated revenue growth which did not materialize in the first quarter, slightly lower product margins during the period, somewhat due to increased packaging costs, and increased marketing spend in the first quarter that did not yield anticipated sales. Operating income decreased $20 million to a loss of $1 million. The decrease in operating income was primarily attributable to the items discussed above as well as higher stock-based compensation during the quarter and slightly higher amortization and depreciation.

 

Liberty Interactive’s board continues to evaluate a plan proposed last fall to spin off its e-commerce businesses into a separate tracking stock to be called Liberty Digital Commerce common stock. The Liberty Digital Commerce Group would have attributed to it Liberty's subsidiaries Provide Commerce, Backcountry.com, Bodybuilding.com, CommerceHub, Right Start, and Evite, which is currently a part of Liberty's subsidiary Celebrate Interactive, along with cash and certain liabilities. The company would retain  QVC, Inc. and its approximate 38% interest in HSN, Inc., along with cash and certain liabilities and changed its name to The QVC Group. Management continues to review the proposed recapitalization and no assurance can be given as to when or if it will be completed.