Certain statements in this Quarterly Report on Form 10-Q constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, including statements regarding our business
strategies; COVID-19 (as defined below); revenue growth at
the impact of the novel coronavirus ("COVID-19") pandemic and local, state and
? federal governmental responses to the pandemic on the economy, our customers,
our vendors and our businesses generally;
customer demand for our products and services and our ability to attract new
? customers and retain existing customers by anticipating customer demand and
adapting to changes in demand;
? competitor responses to our products and services;
? increased digital TV penetration and the impact on channel positioning of our
programs;
? the levels of online traffic to our businesses' websites and our ability to
convert visitors into customers or contributors;
? uncertainties inherent in the development and integration of new business lines
and business strategies;
? our future financial performance, including availability, terms, deployment of
capital and our level of indebtedness;
? our ability to effectively manage our installment sales plans and revolving
credit card programs;
the cost and ability of shipping companies, manufacturers, suppliers, digital
? marketing channels, and vendors to deliver products, equipment, software and
services;
? the outcome of any pending or threatened litigation;
? availability of qualified personnel;
? the impact of the seasonality of our businesses;
changes in, or failure or inability to comply with, government regulations,
? including, without limitation, regulations of the
Commission, and adverse outcomes from regulatory proceedings;
? changes in the nature of key strategic relationships with partners,
distributors, suppliers and vendors;
? domestic and international economic and business conditions and industry
trends, including the impact of Brexit (as defined below);
? changes in the trade policy and trade relations with
? consumer spending levels, including the availability and amount of individual
consumer debt and customer credit losses;
? system interruption and the lack of integration and redundancy in the systems
and infrastructures of our businesses;
? advertising spending levels;
changes in distribution and viewing of television programming, including the
? expanded deployment of video on demand technologies and Internet protocol
television and their impact on home shopping programming;
? rapid technological changes;
failure to protect the security of personal information, subjecting us to
? potentially costly government enforcement actions and/or private litigation and
reputational damage;
? the regulatory and competitive environment of the industries in which we
operate;
? natural disasters, public health crises (including COVID-19), political crises,
and other catastrophic events or other events outside of our control;
? threatened terrorist attacks, political and economic unrest in international
markets and ongoing military action around the world; and
? fluctuations in foreign currency exchange rates.
For additional risk factors, please see Part I, Item 1A. Risk Factors of our
Annual Report on Form 10-K for the year ended
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factors speak only as of the date of this Quarterly Report on Form 10-Q, and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based.
The following discussion and analysis provides information concerning our results of operations and financial condition. This discussion should be read in conjunction with our accompanying condensed consolidated financial statements and the notes thereto and the 2020 10-K.
The information herein relates to
Overview
We own controlling and non-controlling interests in a broad range of video and
online commerce companies. Our largest businesses and reportable segments are
our operating segment comprised of QVC
Our "Corporate and other" category includes our consolidated subsidiary
In
In response to these stay at home restrictions, QVC has mandated that non-essential employees work from home and has reduced the number of employees who are allowed on its production set and has implemented increased cleaning protocols, social distancing measures and temperature screenings for those employees who enter into certain facilities. In some cases, the move to a work from home arrangement for QVC's non-essential employees will be permanent, which has resulted in the reduction of office space. QVC has also mandated that all essential employees who do not feel comfortable coming to work will not be required to do so. As a result of these resource constraints, QVC included fewer hours of live programming on some of its secondary channels and has experienced some delays in shipping at certain fulfillment centers. In certain markets, QVC temporarily increased the wages and salaries for those employees deemed essential who do not have the ability to work from home, including production and fulfillment center employees. The inability to control the spread of COVID-19, or the expansion or extension of these stay at home restrictions could negatively impact QVC's results in the future.
Zulily has seen increased freight surcharges from
The stay at home restrictions imposed in response to COVID-19 required many
traditional brick and mortar retailers to temporarily close their stores, but
allowed distance retailers, including QVC, to continue operating. As a result,
beginning at the end of
As a result, for the three months ended
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such as apparel, and sales returns due to our extended return policy. There were
no remaining estimated reserves as of
In addition, there are several potential adverse impacts of COVID-19 that could cause a material negative impact to QVC's financial results, including its capital and liquidity. These include governmental restrictions on QVC's ability to continue to operate under stay at home restrictions and produce content; reduced demand for products it sells; decreases in the disposable income of existing and potential new customers; the impacts of any recession and other uncertainties with respect to the continuity of government stimulus programs implemented in response to COVID-19; increased currency volatility resulting in adverse currency rate fluctuations; higher unemployment; labor shortages; and an adverse impact to QVC's supply chain and shipping disruptions for both the products it imports and purchases domestically and the products it sells, including essential products experiencing higher demand, due to factory closures, labor shortages and other resource constraints. While the impact is currently uncertain, the inability to control the spread of COVID-19 could cause any one of these adverse impacts, or combination of adverse impacts, to have a material impact on QVC's financial results.
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Results of Operations-Consolidated
General. We provide in the tables below information regarding our consolidated Operating Results and Other Income and Expense, as well as information regarding the contribution to those items from our principal reporting segments. The "Corporate and other" category consists of those assets or businesses which we do not disclose separately. For a more detailed discussion and analysis of the financial results of the principal reporting segments, see "Results of Operations-Businesses" below.
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