| Information About QVC Group's Operating Segments |
(10) Information About QVC Group's Operating Segments QVC Group, through its ownership interests in subsidiaries and other companies, is primarily engaged in the video and online commerce industries. QVC Group identifies its reportable segments as (A) those operating segments that represent 10% or more of its consolidated annual revenue, annual Adjusted OIBDA (as defined below) or total assets and (B) those equity method affiliates whose share of earnings represent 10% or more of QVC Group's annual pre-tax earnings. The segment presentation for prior periods has been conformed to the current period segment presentation. The QVC Group chief operating decision maker, the chief executive officer, primarily evaluates performance and makes decisions about allocating resources to its operating segments based on financial measures such as revenue, cost of goods sold, gross profit, operating expense, advertising expense, selling, general and administrative expense and Adjusted OIBDA, in addition to average sales price per unit, number of units shipped and revenue or sales per customer equivalent. In addition, QVC Group reviews nonfinancial measures such as unique website visitors, conversion rates and active customers, as appropriate. For segment reporting purposes, QVC Group defines Adjusted OIBDA as revenue less cost of goods sold, operating expenses, and selling, general and administrative expenses excluding stock-based compensation and, where applicable, separately identified items impacting comparability. QVC Group believes this measure is an important indicator of the operational strength and performance of its businesses by identifying those items that are not directly a reflection of each business’ performance or indicative of ongoing business trends. In addition, this measure allows management to view operating results and perform analytical comparisons and benchmarking between businesses and identify strategies to improve performance. This measure of performance excludes depreciation and amortization, stock-based compensation, and where applicable, separately identified impairments, litigation settlements, restructuring, acquisition-related costs, and gains (losses) on sale-leaseback transactions, that are included in the measurement of operating income (loss) pursuant to GAAP. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income (loss), net earnings (loss), cash flows provided by operating activities and other measures of financial performance prepared in accordance with GAAP. QVC Group generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current prices. For the six months ended June 30, 2025, QVC Group has identified the following operating segments as its reportable segments: | ● | QxH – QVC U.S. and HSN market and sell a wide variety of consumer products in the U.S., primarily by means of their televised shopping programs and via the Internet through their websites (including social media) and mobile applications. |
| ● | QVC International – QVC International markets and sells a wide variety of consumer products in several foreign countries, primarily by means of its televised shopping programs and via the Internet through its international websites (including social media) and mobile applications. |
| ● | CBI – CBI consists of a portfolio of aspirational home and apparel brands in the U.S. that sell merchandise through brick-and-mortar retail locations as well as via the Internet through their websites. |
QVC Group's operating segments are strategic business units that offer different products and services. They are managed separately because each segment requires different technologies, distribution channels and marketing strategies. The accounting policies of the segments are the same as those described in the Company's Summary of Significant Accounting Policies in the 2024 10-K. Performance Measures Disaggregated revenue by segment and product category consisted of the following: | | | | | | | | | | | | | | | Three months ended | | | | June 30, 2025 | | | | | QxH | | QVC Int'l | | CBI | | Corp and other | | Total | | | | in millions | | Home | | $ | 527 | | 233 | | 214 | | — | | 974 | | Apparel | | | 299 | | 112 | | 38 | | — | | 449 | | Beauty | | | 208 | | 138 | | — | | — | | 346 | | Accessories | | | 180 | | 56 | | — | | — | | 236 | | Jewelry | | | 62 | | 37 | | — | | — | | 99 | | Electronics | | | 76 | | 16 | | — | | — | | 92 | | Other revenue | | | 39 | | 1 | | — | | — | | 40 | | Total Net Revenue | | $ | 1,391 | | 593 | | 252 | | — | | 2,236 | |
| | | | | | | | | | | | | | | Six months ended | | | | June 30, 2025 | | | | | QxH | | QVC Int'l | | CBI | | Corp and other | | Total | | | | in millions | | Home | | $ | 1,065 | | 456 | | 374 | | — | | 1,895 | | Apparel | | | 557 | | 211 | | 78 | | — | | 846 | | Beauty | | | 419 | | 258 | | — | | — | | 677 | | Accessories | | | 353 | | 102 | | — | | — | | 455 | | Jewelry | | | 125 | | 70 | | — | | — | | 195 | | Electronics | | | 165 | | 31 | | — | | — | | 196 | | Other revenue | | | 75 | | 2 | | — | | — | | 77 | | Total Net Revenue | | $ | 2,759 | | 1,130 | | 452 | | — | | 4,341 | |
| | | | | | | | | | | | | | Three months ended | | | June 30, 2024 | | | | QxH | | QVC Int'l | | CBI | | Corp and other | | Total | | | | in millions | Home | | $ | 596 | | 221 | | 234 | | — | | 1,051 | Apparel | | | 328 | | 105 | | 39 | | — | | 472 | Beauty | | | 239 | | 141 | | — | | — | | 380 | Accessories | | | 212 | | 53 | | — | | — | | 265 | Jewelry | | | 73 | | 39 | | — | | — | | 112 | Electronics | | | 73 | | 16 | | — | | — | | 89 | Other revenue | | | 37 | | 1 | | — | | — | | 38 | Total Net Revenue | | $ | 1,558 | | 576 | | 273 | | — | | 2,407 |
| | | | | | | | | | | | | | | Six months ended | | | | June 30, 2024 | | | | | QxH | | QVC Int'l | | CBI | | Corp and other | | Total | | | | in millions | | Home | | $ | 1,185 | | 458 | | 423 | | — | | 2,066 | | Apparel | | | 610 | | 213 | | 81 | | — | | 904 | | Beauty | | | 478 | | 270 | | — | | — | | 748 | | Accessories | | | 413 | | 101 | | — | | — | | 514 | | Jewelry | | | 153 | | 72 | | — | | — | | 225 | | Electronics | | | 181 | | 31 | | — | | — | | 212 | | Other revenue | | | 77 | | 3 | | — | | — | | 80 | | Total Net Revenue | | $ | 3,097 | | 1,148 | | 504 | | — | | 4,749 | |
Other performance measures reviewed by the CODM are as follows: | | | | | | | | | | | | | | | Three months ended June 30, 2025 | | | | QxH | | QVC Int'l | | CBI | | Corporate and other | | Total | | | | | amounts in millions | | Net Revenue | | $ | 1,391 | | 593 | | 252 | | — | | 2,236 | | Cost of goods sold (exclusive of depreciation and amortization) | | | 900 | | 381 | | 141 | | — | | 1,422 | | Gross profit | | | 491 | | 212 | | 111 | | — | | 814 | | Operating expense | | | 107 | | 47 | | 10 | | — | | 164 | | Advertising expense | | | 68 | | 10 | | 45 | | — | | 123 | | Selling, general and administrative expense (exclusive of stock-based compensation and advertising) | | | 166 | | 80 | | 39 | | 10 | | 295 | | Adjusted OIBDA | | $ | 150 | | 75 | | 17 | | (10) | | 232 | |
| | | | | | | | | | | | | | | Six months ended June 30, 2025 | | | | QxH | | QVC Int'l | | CBI | | Corporate and other | | Total | | | | | amounts in millions | | Net Revenue | | $ | 2,759 | | 1,130 | | 452 | | — | | 4,341 | | Cost of goods sold (exclusive of depreciation and amortization) | | | 1,823 | | 729 | | 256 | | — | | 2,808 | | Gross profit | | | 936 | | 401 | | 196 | | — | | 1,533 | | Operating expense | | | 218 | | 90 | | 19 | | — | | 327 | | Advertising expense | | | 123 | | 18 | | 84 | | — | | 225 | | Selling, general and administrative expense (exclusive of stock-based compensation and advertising) | | | 323 | | 155 | | 80 | | 14 | | 572 | | Adjusted OIBDA | | $ | 272 | | 138 | | 13 | | (14) | | 409 | |
| | | | | | | | | | | | | | | Three months ended June 30, 2024 | | | | QxH | | QVC Int'l | | CBI | | Corporate and other | | Total | | | | | amounts in millions | | Net Revenue | | $ | 1,558 | | 576 | | 273 | | — | | 2,407 | | Cost of goods sold (exclusive of depreciation and amortization) | | | 1,007 | | 367 | | 158 | | — | | 1,532 | | Gross profit | | | 551 | | 209 | | 115 | | — | | 875 | | Operating expense | | | 122 | | 45 | | 11 | | — | | 178 | | Advertising expense | | | 63 | | 9 | | 50 | | — | | 122 | | Selling, general and administrative expense (exclusive of stock-based compensation and advertising) | | | 172 | | 78 | | 35 | | 8 | | 293 | | Adjusted OIBDA | | $ | 194 | | 77 | | 19 | | (8) | | 282 | |
| | | | | | | | | | | | | | | Six months ended June 30, 2024 | | | | QxH | | QVC Int'l | | CBI | | Corporate and other | | Total | | | | | amounts in millions | | Net Revenue | | $ | 3,097 | | 1,148 | | 504 | | — | | 4,749 | | Cost of goods sold (exclusive of depreciation and amortization) | | | 2,014 | | 733 | | 296 | | — | | 3,043 | | Gross profit | | | 1,083 | | 415 | | 208 | | — | | 1,706 | | Operating expense | | | 247 | | 90 | | 21 | | — | | 358 | | Advertising expense | | | 116 | | 16 | | 93 | | — | | 225 | | Selling, general and administrative expense (exclusive of stock-based compensation and advertising) | | | 341 | | 157 | | 69 | | 15 | | 582 | | Adjusted OIBDA | | $ | 379 | | 152 | | 25 | | (15) | | 541 | |
Other Information | | | | | | | | | June 30, 2025 | | | | Total assets | | Capital expenditures | | | | | amounts in millions | | QxH | | $ | 3,703 | | 49 | | QVC International | | | 1,899 | | 14 | | CBI | | | 554 | | 9 | | Corporate and other | | | 543 | | — | | Consolidated QVC Group | | $ | 6,699 | | 72 | |
The following table provides a reconciliation of Adjusted OIBDA to Operating income (loss) and Earnings (loss) before income taxes: | | | | | | | | | | | | | Three months ended | | Six months ended | | | | June 30, | | June 30, | | | | 2025 | | 2024 | | 2025 | | 2024 | | | | | amounts in millions | | Adjusted OIBDA | | $ | 232 | | 282 | | 409 | | 541 | | Stock-based compensation | | | (4) | | (3) | | (8) | | (19) | | Depreciation and amortization | | | (105) | | (96) | | (207) | | (195) | | Impairment of goodwill and intangible assets | | | (2,395) | | — | | (2,395) | | — | | Restructuring costs | | | — | | (18) | | (57) | | (18) | | Gain on sale leaseback transaction | | | — | | — | | — | | 1 | | Operating income (loss) | | $ | (2,272) | | 165 | | (2,258) | | 310 | | Interest expense | | | (117) | | (119) | | (229) | | (236) | | Realized and unrealized gains (losses) on financial instruments, net | | | (21) | | (10) | | (36) | | (17) | | Other, net | | | (1) | | 11 | | 9 | | 21 | | Earnings (loss) before income taxes | | $ | (2,411) | | 47 | | (2,514) | | 78 | |
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