pQVCs consolidated revenue increased 14% in the fourth quarter to $2.4 billion and 1% to $7.4 billion for the year. Adjusted OIBDA increased 27% to $530 million in the fourth quarter and 4% to $1.6 billion for the year, while operating income increased 40% and 7%, respectively. br /
With respect to QVCs domestic business, revenue increased 13% in the fourth quarter to $1.7 billion and 2% for the year to $5.0 billion. Adjusted OIBDA increased 32% to $371 million in the fourth quarter and 4% for the year to $1.1 billion. For the quarter and the year, the mix of products shifted from the jewelry and apparel product areas to home and, to a lesser extent, the accessories product areas. The average selling price for the fourth quarter increased 4% from $48.33 to $50.37 with the total number of units sold increasing 6% to 35.2 million from 33.2 million. For the year, the average selling price increased 2% from $47.94 to $49.01 and the total number of units sold declined 3% to 108.7 million from 112.5 million. Returns as a percent of domestic sales decreased to 16% from 18% for the fourth quarter and to 18% from 19% for the year due to the sales mix moving from jewelry and apparel to home products, which typically have a lower return rate. QVC.com sales as a percentage of domestic sales increased from 28% to 31% for the quarter and from 25% to 29% for the year. The domestic adjusted OIBDA margin(2) increased 306 basis points to 22% for the quarter and remained relatively consistent at 22% for the year. The increase for the quarter was primarily due to a higher gross margin percentage resulting from more efficient warehouse operations and freight savings as well as favorable customer service expenses and the leverage of fixed costs. br /
QVCs international revenue increased 15% in the fourth quarter to $751 million from $655 million including the impact of favorable exchange rates in the UK, Germany and Japan. For the year, international revenue remained flat at $2.4 billion despite the unfavorable foreign currency exchange rates in the UK and Germany and including favorable exchange rates in Japan. Excluding the effect of exchange rates, international revenue increased 6% in the UK, 8% in Germany and 4% in Japan in the fourth quarter and increased 2% in the UK, 3% in Germany and 1% in Japan for the year. International adjusted OIBDA increased 19% to $159 million in the fourth quarter and 4% to $451 million for the year. International adjusted OIBDA margins increased 70 basis points for the quarter and 80 basis points for the year due primarily to favorable gross margins. The fourth quarter gross margin increased due primarily to favorable warehouse operations across each market and a reduction in realized inventory foreign exchange losses, particularly in the UK. The gross margin increased for the year due primarily to lower warehouse costs and a favorable obsolescence provision across each market. Excluding the impact of exchange rates, QVCs international adjusted OIBDA increased 10% in the fourth quarter and 5% for the year.br /
QVC UKs revenue grew 6% and 2% in local currency in the fourth quarter and for the year, respectively. The UKs average selling price in local currency increased 1% for the fourth quarter and 4% for the year and units sold increased 4% for the fourth quarter but declined 2% for the year. QVC UK experienced a higher gross margin in the fourth quarter and the year due primarily to a favorable obsolescence provision, lower warehouse expenses and a reduction in realized inventory foreign exchange losses. br /
QVC Germanys revenue grew 8% and 3% in local currency in the fourth quarter and for the year, respectively. QVC Germanys average selling price in local currency increased 3% for the fourth quarter and 4% for the year and units sold increased 5% for the fourth quarter but declined 1% for the year. QVC Germany experienced a lower gross margin in an effort to move less productive inventory and an unfavorable obsolescence provision, partially offset by favorable warehouse costs. For the year, Germanys gross margin increased due to a favorable obsolescence provision and warehouse costs partially offset by a lower product margin.br /
QVC Japans revenue grew 4% and 1% in local currency in the fourth quarter and for the year, respectively. QVC Japan achieved growth of 17% in units sold for the quarter and 9% for the year with the average selling price in local currency declining 12% and 7% for the fourth quarter and year, respectively. For the fourth quarter, Japan experienced sales growth in accessories, apparel and health and beauty categories and declines in sales of jewelry and home products. For the year, Japan experienced sales growth in the accessories, apparel and jewelry categories and declines in sales of home, health and beauty products. br /
QVC intends to launch its television programming in Italy in the fourth quarter of 2010. Included in the international adjusted OIBDA results for the fourth quarter and the year ended December 31, 2009 are $2 million and $5 million, respectively, of costs related to the expected launch of the QVC Italy service.br /
QVCs outstanding bank and bond debt was $4.0 billion at December 31, 2009.br /
QVCs management team did an extraordinary job and delivered impressive results, stated Greg Maffei, Liberty President and CEO. /p
pQVCs fourth quarter results are outstanding, stated Mike George, QVC President and CEO. We grew revenue and profitability at one of the highest rates in the last decade and are showing improving trends in all markets. The fourth quarter was the first quarter since Q1 of 2008 when every country posted positive revenue growth in local currency. We are also encouraged that our results show a balanced performance, with strong gains in top and bottom line results indicative that growth is due to both compelling, exclusive content as well as aggressive cost management. In the fourth quarter we debuted our Isaac Mizrahi lifestyle brand along with several other leading brands and designers, and experienced the most successful Black Friday event in QVC history. QVCs global market position will be further strengthened in 2010 with the launch of QVC Italy and the implementation of our technology makeover including our global eCommerce platform, customer relationship and call center management platform and our multi-media infrastructure./p
