With no news in the QVC land I figured I would provide an update on what I see with TikTok.
WaPo ran a story that in the third quarter TikTok shop sold $19B worth of merch and the U.S. accounted for $4B-$4.5B of that. Now as impressive as that is it was reported that only 2% of that revenue in the U.S. goes to live streaming. Interesting comment though, "many in the West still treat TikTok live as QVC in vertical format, but young people aren't interested in watching QVC remade for phone screens."
That said when I look at daily average transactions for QVC there has been a recent shift that has taken place. From April 5th, 2025 - September 12th QVC Tiktok was averaging 4.4K daily transactions. I get this as I track the transaction counts daily and from April 5th - September 12th they did around 706.2K in total over the 160 day period. If we estimate a $45.00 average transaction value (ATV) this puts the estimated revenue around $31.78M generated in this time.
Not bad!
Now since September 13th though the game has changed as I now have the average going from 4.4K to 10.8K. Wowza! I calculate this as there has been 800K transactions reported from TikTok over this 74 day period and again using $45.00 as an ATV this grosses to around $36M. With Alex Wellen they have clearly figured out how to unlock some scale. They have also since expanded to a specific channel for QVC Beauty as well as launched on TikTok internationally to drive growth.
Now before we get carried away, which is easy to do, this in total is estimated to be $67.89M since they put the TikTok focus in play or 1.2% of the revenue QVC generated in nine months this year ($5,871M).
The question then becomes how does this platform continue to scale? From April 5th - September 12th the transaction volume basically compounded at a daily rate of 0.77% and it's recently improved since September 13th to a daily rate of 0.80%. If we assume a linear growth path we could get something along the lines of:
Meaning if the daily transaction continue to compound at 0.80% within a year they could be averaging 188.7K transactions a day in 360 days which would be around $8.49M in daily gross from TikTok or $3,099.06M annually if that held. Wowza!
Now to bring things back down to reality we need to realize, as I wrote above, QVC has launched multiple new channels and gone into new countries with TikTok which has boosted their reach. While this is important, it also then means growth is not linear and thus cannot be forecasted the way I showed above. Each new channel or country boosts reach but also sets a new floor and that does not mean the growth is linear as it appears or investors may hope for. Their growth in TikTok is really far too new to make any real logical conclusions on how far can it go. While each new channel/country sets a floor there is also likely a ceiling that exists too.
We also need to consider the cost of increased advertising spend as they now enter a pay-to-play arena. In nine months this year advertising spend has gone from $202M in 2024 to $228M in 2025 which is a 13% increase. In the third quarter though advertising spend increased 24% going from $70M in 2024 to $87M in 2025 BUT that's if you sum up QxH + international spend as if you take just QxH advertising increased 26% going from $62M to $78M in the third quarter. I am not insinuating that each $ here was 1:1 allocated to TikTok but given it's their largest growth engine I would think majority are going here and not going to other streaming/social sources given how focused management has been on TikTok specifically. All their language is build around TikTok.
***To be clear, I cannot state all this advertising spend went to TikTok BUT this is where management has been spending their major focus and it's likely at least 80% of this increase has come because of TikTok because this is their biggest growth platform currently to offset the linear declines.
In the third quarter (Jul 1st - Sept 30th) I estimate the TikTok shop pulled in 556.6K transactions (Jul 1st started at 543.4K and Sept 30th ended at 1,100K) which would be around ~$25.05M in gross. This would mean they spent $17M more in QxH + international advertising to grab ~$25.05M in gross revenue. I have also seen affiliate channels on TikTok complain about QVC in that they bring the demand to QVC but orders get cancelled because QVC cannot provide inventory or meet the demand. Some other affiliates have also complained QVC leverages them to get reach and if an affiliate gets too big they cut them off because of commissions. While these points are anecdotal an investor should take them into consideration because if there is a hint of truth it would likely mean these TikTok transaction numbers are possibly inflated depending on the scale and on the surface they look better than the actual revenue capture. We also need to factor returns into this mix as that likely takes a few points off the gross revenue but wouldn't show in the TikTok transactions either.
In theory QVC could still book these as new customers since they made the purchase but QVC did not or could not fulfill.
I find the current QVC path on TikTok to be positive so far, but I also believe there are risks in relying on this as a true revenue pivot. It is also again worth noting that not all advertising spend is directly to TikTok but I believe given their corporate push the management sees TikTok as their main growth engine out of any other platform. With linear cable still driving most of the revenue this platform needs to scale fast to give creditors the ability to see a growth path. Until then I will watch, but so far my customer modeling has proven to hold up and in turn my projections on revenue with it.
I believe this revenue channel is currently too small to change much and chapter 11 is still the likely path. Especially as time has gone on and no news on an LME has come out. As we move into 2026 with no news this continues to reinforce my few posts and comments that they wait until after the holidays before filing as this allows them to capture holiday revenue with no disruptions to customers or even vendors.
Greg Maffei's contract expires December 31st, 2025 which I still find off given his extension wasn't signed until May 27th, 2025 (retroactive for January 2025). It does auto renew on December 31st to extend until December 31st, 2026 unless either party gives notice 30 days prior to December 31st, 2025 or his employment ends and or before December 31st, 2025. Seems odd the long-time chairman would have such a deal. For context Maffei first agreement was signed in 2014 and expired in 2019, his next agreement was December 2019 - December 2024, and the newest is retroactive from January 2025 - December 2025 with the auto extension. This of course is my own speculation but the data point is just that....a data point. In isolation it's nothing, but in aggregate something to consider.
Happy Investing,
Sean
- March 7th, 2025: Fitch downgrades QVC to B- from B
- May 21st, 2025: Moody's downgraded QVC, INc from B2 toCaa1.
- May 23rd, 2025: QVC Group suspended paying QVCGP dividend.
- May 27th, 2025: Greg Maffei chairman agreement extended. The Employment Agreement provides for an initial term expiring December 31, 2025, which will be automatically extended through December 31, 2026 unless a notice of nonrenewal is provided by either party at least 30 days prior to December 31, 2025, or Mr. Maffei’s employment with the Company ends before such date (such period of employment, the “Term”).
- May 28th, 2025: QVC hired Evercore, Inc and Kirkland & Ellis and senior holders hired PJT Partners and David Polk & Wardell
- LITNA holders hired Centerview and Akin Gump Strauss Hauer & Feld
- May 30th, 2025: Fitch downgraded QVC again going from B- to CCC+.
- June 20th, 2025: QVC hired Roger Meltzer of DLA Piper and Carol Flaton to the board paying each $50K a month.
- August 7th, 2025: Earnings released and revenue further disappointed. Revolver had $75M drawn in addition. It was also reported after earnings period company borrowed another $975M on the revolver bringing total borrowings to $2,900M.
- August 13th, 2025: QVC credit syndicate got 75% together and hired Simpson Thacher & Bartlett.
- August 15th, 2025: Company adjusted executive compensation which mirrors a KERP/KEIP plan.
- August 26th, 2025: S&P downgraded QVC from CCC+ to CCC.
- September 26th, 2025: QVC amended and restated certificate of incorporation for QVC, Inc and amended and restated By-Laws of QVC, Inc. Paul Keglevic (part of Rite Aid and Envision bankruptcy) and Jill Frizzley (president of Wildrose Partners and oversaw governance prior to bankruptcy filings).
- October 6th, 2025: Moody's downgraded QVC, Inc from Caa1 to Caa3.
|
