Hello 60,
I am not sure I agree with TJ. I think he very much underweight the impact cord-cutting has had on QVC/HSN.
QVC in Q3/Q4 2019 had 10,700,000 total customers and by Q1 2020 that total was already declined to 10,553,000 (-1.4%). Then we get the massive boom because of C-19 and total QVC customers peaked at 11,777,000 in Q1 2021 which was an increase of 11.6% as folks were stuck in the house. During this time cord-cutting continued to hold trend but the sheer amount of folks in their house improved viewership.
Where I start to question things is by Q4 2021 total customers declined to 10,394,000 which is a -11.7% decline from the 11,777,000 peak but more critically a -2.9% decline from the 2019 numbers. The Rocky Mountain fire (happened mid-December 2021) catches all the responsibility for business disruption but does no one find it odd that QVC was gifted 1,224,000 customers during the peak rush and somehow lost them all + lost 159K from the Q1 2020 low? Rocky then accelerated things as they sat on inventory and couldn't meet customer expectations, but I challenge the problems were there before the fire.
I have posted my own models that forecast QVC existing customers and have been within a tight range of accuracy since Q1 2023.
" If cord cutting is your north star for the bear case, the math doesn’t really check out."
At this time I do not agree with the analysis as he presents it. The numbers do not support him and the math does check out.
" What’s interesting about this whole backdrop is that at Q4 of 2024, if QVC downstreamed their cash from HoldCo and MidCo, they would have had a leverage ratio of 2.7x at QVC, Inc."
If my grandmother had wheels she would be a bike. I get the point he's making but ParCo/HoldCo need the cash themselves and it's not a real working theory and some of that is also for CBI.
As for growth drivers, Tiktok stopped updating the QVC shop numbers once they hit 1M transactions on a daily basis BUT they still update for every thousand now. I checked this AM and Tiktok now has the QVC shop at 1.1M. They hit 1M transactions on 09/13/2025 and hit 1.1M really on 9/30/2025 (Tiktok reports are always for prior day). This means that in that time QVC has been averaging around ~5.6K transactions daily and at a $45 ATV this is $4.5M in top-line between their core channel and what affiliates bring in.
QVC got serious about Tiktok on April 6th (or around there) and I estimate the top-line revenue to be around $36,391,500 if I use that $45 ATV number. Tiktok would have to grow to a combined 25,000 daily transactions at $45 ATV to grow to a $410.63M business and that's only 4.6% of the revenue QVC, Inc did in 2024. With 90% of revenue still tied to linear cable I am not seeing the potential yet.
TJ stated "And I haven’t even mentioned the media component! Do you have any idea what it takes to plan a show to sell certain products, to source certain products for that show, to make sure that you have the fulfillment capacity to support an order spike, to have all of the data to determine which products at what quantities to buy for that show? This is about as unique a business as you can get. There is nothing like it. And all of those components that make QVC unique and attractive also add some serious volatility when times get tough. If you had a show planned for a low-margin product, and then tariffs come in, you have to change everything. It takes time to get your groove back. After all of the craziness of the past few years, they got dealt another bad hand in the first half of this year."
This is where I go back to one of my earlier posts from when I flipped. The MOAT that QVC has isn't there. To do what they did you needed expensive cameras, studios, hosts, and various other things. You know how many I see on Tiktok doing the exact same thing as QVC? All you need now is a cell phone and anyone can get on Tiktok. Does QVC have advantage of scale? Yes! But to play it off as they're unique isn't reality anymore. The amount of people I see live streaming from their kitchen and selling some product is no different than what I see from QVC itself at times.
"I think the fact remains that the vast majority of trouble that QVC has dealt with were problems that are basically in the rear-view mirror..... so yeah, I think QVC has been dealt a bad hand for multiple years straight, but if you know poker, you always have reversion to the mean to back you up. "
Perhaps he is right. Although many times folks go bust in poker too. Let's see if QVC has got a good hand or if they have been bluffing. Either way the hand will be visible soon enough.
-Sean |
