QVC's Q2 2025 Earnings Call: Navigating Contradictions in Revenue Growth, Customer Trends, and Tariff Strategies

Social and streaming revenue growth, customer count and acquisition, tariff mitigation strategies, tariff impact and mitigation strategies, and social and streaming revenue growth are the key contradictions discussed in QVC Group Inc.'s latest 2025Q2 earnings call.



Challenging Macro Environment and Revenue Decline:
- QVC Group reported a 9% decline in total revenue in Q2 in constant currency, with QxH's revenue declining 11%.
- This was primarily due to ongoing volatility in consumer confidence, declining linear TV viewership (QxH minutes viewed declined 15%), and top-line pressure in international markets, particularly Japan.

Social and Streaming Growth:
- Social and streaming revenue experienced over 30% growth versus Q2 of 2024, with the percentage of QxH revenue attributed to these platforms approaching double digits.
- Growth was driven by strategic initiatives like TikTok Shop, the expansion of QVC and HSN's content on streaming services, and the strategic agreement with TikTok.

Customer Dynamics:
- The total QxH customer count declined 12% in the quarter, driven by a 10% decrease in existing customers and a 21% decrease in new customers.
- The decline was primarily due to the ongoing pressure from linear TV household decreases, but the addition of TikTok shop customers showed early signs of success in social strategy.

Tariff Management and Sourcing Diversification:
- QVC Group has been actively managing tariff impacts by reducing dependence on high-tariff countries, diversifying sourcing, and implementing price changes where necessary.
- The company aims to ensure no single country accounts for more than 1/3 of its sourced goods in the U.S. by the end of the year, which is a significant shift from previous sourcing strategies.

Financial Fundamentals and Capital Structure:
- Despite challenges, QVC Group made progress in reducing net debt by over $1.5 billion since the end of 2021, improving its financial flexibility.
- The company suspended its quarterly dividend for preferred stockholders and drew down funds on its revolving credit facility to enhance liquidity, reflecting its focus on preserving cash and enhancing long-term value.