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QVC, the home shopping king, issued a going concern warning amid a decades-long decline in linear TV viewership and heightened competition in livestream e-commerce.
In a filing with the Securities and Exchange Commission, the parent of QVC and HSN said it could not file its annual report on time in light of ongoing negotiations with lenders. QVC indicated “there remains substantial doubt about the company’s ability to continue as a going concern.”
The warning comes as QVC posted a net loss of $2.2 billion in the nine months ended September 30, as sales slumped 7.4% to $5.9 billion.
Last year, both Fitch and Moody’s downgraded their debt ratings on QVC. Moody’s at the time said the downgrade reflected QVC’s “large debt load” and deteriorating operating performance caused by “accelerating cable cord-cutting, falling customer count and lower customer engagement.”
Moody’s further said QVC’s performance would likely remain weak “as the company contends with secular pressures to its core business, an uncertain demand environment for discretionary products and an expectation for elevated costs associated with higher tariffs.”
On its third-quarter investor call, Billy Wafford, CFO, said QVC’s core home category, making up about 40% of sales, was down 7% in the third quarter -- and impacted by “reduced demand in culinary and ongoing pressure in our Today's Special Value events, many of which were impacted by tariffs.”
Charges for management compensation incentives related to its “Win” turnaround program had a “material impact” on earnings.
On the call, CEO David Rawlinson said QVC was making progress in its Win initiative that calls for accelerated investments in social shopping. Revenues from social and streaming platforms grew 30% over last year, with QVC now ranking among the top sellers on U.S. TikTok Shop. Streaming growth is being boosted by additional FAST TV channel launches on Amazon Fire TV and Roku, and the launch of a new live-like channel called the Deals Channel.
Revenue attributed to social and streaming platforms were still in the low-double digits as a percentage of its core QVC and HSN platforms. Rawlinson said, “We are encouraged by the results we're seeing in our social and streaming platforms against what continues to be a challenging tariff, viewership and macroeconomic backdrop.”
Analysts Believe QVC May Be Too Late to the Game
Writing for The Robin Report, Warren Shoulberg believes QVC was too slow to evolve to e-commerce in the early days -- and is now late to social and conversational commerce. He also said the TV-shopping experience is “a tired and irrelevant visual presence that certainly didn’t work for next gen customers.”
For WWD, veteran retail reporter Dave Moin questioned “whether the company innovated fast enough to keep up with competitors such as Amazon and emerging retail formats and attract new generations of shoppers.”
Among suggestions in a Drexel University blog, Lawrence Duke, a marketing professor at Drexel, said QVC could “streamline operations and to emphasize a lean, digital-first live-commerce platform. Another would be to focus more intentionally on the 50+ demographic, positioning QVC as a trusted, community-centered shopping destination for an affluent but often overlooked segment. A third option would be to differentiate through curated expertise, emphasizing host credibility and product storytelling rather than price competition.”