QVC Group Inc.

08/04/2026 | Press release | Distributed by Public on 08/04/2026 12:27

Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
Overview
We own controlling and non-controlling interests in a broad range of video and online commerce companies. Our largest businesses and reportable segments are QxH (QVC U.S. and HSN, Inc. ("HSN")) and QVC International. QVC, Inc. ("QVC"), which includes QxH and QVC International, markets and sells a wide variety of consumer products in the United States ("U.S.") and several foreign countries via highly engaging video-rich, interactive shopping experiences primarily by means of its televised shopping programs and the internet through its domestic and international websites and mobile applications. Cornerstone Brands, Inc. ("CBI") consists of a portfolio of aspirational home and apparel brands and is a reportable segment. Our "Corporate and other" category includes corporate activity along with various equity investments.
As part of its ongoing strategy to expand into a live social shopping company, QVC Group has undertaken various organizational and strategic changes. As part of such transition, and pursuant to the reorganization agreement with Liberty Media Corporation ("LMC") as discussed in Item I, Note 1 "Basis of Presentation" to the accompanying condensed consolidated financial statements), all then-current officers of QVC Group (with limited exceptions) stepped down from their officer positions, during the first half of 2025, and these positions were assumed by members of the QVC management team, effective as of April 1, 2025. LMC continued to support QVC Group throughout the transition period, which was substantially completed during the third quarter of 2025. During the third quarter of 2025, the management of QVC Group and QVC began to perform certain general and administrative services previously provided to QVC Group by LMC, and as a result LMC substantially reduced its provided services.
Chapter 11 Proceedings
Voluntary Filing under Chapter 11
On April 16, 2026 (the "Petition Date"), QVC Group, Inc. ("QVC Group" or the "Company" and together with certain of its affiliates, the "Company Parties") commenced voluntary cases (the "Chapter 11 Cases") under Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of Texas (the "Bankruptcy Court"). On April 17, 2026, the Bankruptcy Court entered an order authorizing the joint administration of the Chapter 11 Cases under the caption QVC Group, Inc., et al, Case No. 26-90447. Certain foreign subsidiaries were not part of the Chapter 11 petition filing and continue to operate in the normal course of business. As of the Petition Date, we are operating our businesses as "debtor-in-possession" ("DIP") under the jurisdiction of the Bankruptcy Court in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. QVC Group and QVC received approval from the Bankruptcy Court for a variety of "first day" motions to continue their ordinary course operations during the Chapter 11 Cases, which were designed primarily to mitigate the impact of the Chapter 11 Cases on our operations, vendors, suppliers, customers and employees. As a result, we were able to conduct normal business activities and satisfy all associated obligations for the period following the Petition Date and were also authorized to pay employee wages and benefits, and certain vendors and suppliers in the ordinary course for goods and services provided prior to the Petition Date.
Commencing the Chapter 11 Cases constituted an event of default that accelerated the Company Parties' respective obligations under (i) the 4.750% Senior Secured Notes due 2027, 4.375% Senior Secured Notes due 2028, 6.875% Senior Secured Notes due 2029, 5.450% Senior Secured Notes due 2034, 5.950% Senior Secured Notes due 2043, 6.375% Senior Secured Notes due 2067 (the "2067 Notes"), and 6.250% Senior Secured Notes due 2068 (the "2068 Notes") (collectively, the "QVC Notes") issued by QVC, (ii) the 3.750% senior unsecured exchangeable debentures due 2030, 4.000% senior unsecured exchangeable debentures due 2029, 8.250% senior unsecured debentures due 2030, and 8.500% senior unsecured debentures due 2029 (collectively, the "LINTA Notes") issued by Liberty Interactive LLC ("LI LIC") and (iii) the Fifth Amended and Restated Credit Agreement ("Credit Agreement"). The Credit Agreement, together with the QVC Notes and LINTA Notes, are herein referred to as the "Debt Instruments".
Restructuring Support Agreement
On the Petition Date, prior to the commencement of the Chapter 11 Cases, the Company Parties entered into a Restructuring Support Agreement (the "Restructuring Support Agreement" and the holders parties thereto, the "Supporting Stakeholders"), with certain holders of our Debt Instruments. The Restructuring Support Agreement contemplates agreed-upon terms for a comprehensive restructuring with respect to the Company Parties' capital structure (the "Financial Restructuring") to be implemented through a proposed prepackaged plan of reorganization (the "Plan").
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The Restructuring Support Agreement provides certain milestones for the Financial Restructuring. Failure of the Company to satisfy these milestones without a waiver or consensual amendment would provide the Supporting Stakeholders a termination right under the Restructuring Support Agreement. These milestones include (i) the Company Parties shall have caused solicitation of votes on the Plan to begin no later than April 16, 2026, but prior to the commencement of the Chapter 11 Cases, (ii) the Petition Date shall have occurred no later than April 16, 2026, (iii) the Plan and Disclosure Statement (excluding any exhibits and appendices thereto) shall have been filed no later than the Petition Date, (iv) the debtor-in-possession letter of credit ("DIP LC") Interim Order shall have been entered no later than 3 days after the Petition Date, (v) the DIP LC Final Order shall have been entered no later than 30 days after the Petition Date, (vi) the Plan shall have been confirmed no later than 75 days after the Petition Date and (vii) the Plan Effective Date shall have occurred no later than 90 days after the Petition Date. The Debtors satisfied the milestones (i) through (v), and the Supporting Stakeholders have extended the time to comply with milestones (vi) and (vii).
Plan of Reorganization
On July 20, 2026, the Bankruptcy Court entered an order confirming the Plan. The Plan remains subject to the satisfaction or waiver of the remaining conditions to effectiveness and any applicable stay, appeal or other challenge. Accordingly, there can be no assurance as to when, or ultimately whether, the Plan will become effective or the Company will emerge from Chapter 11.
Automatic Stay and Other Protections
Subject to certain exceptions under the Bankruptcy Code, pursuant to Section 362 of the Bankruptcy Code, the filing of our Chapter 11 Cases automatically stayed the continuation of most legal proceedings or the filing of other actions against or on behalf of QVC Group or our property to recover on, collect or secure a claim arising prior to the filing of our Chapter 11 Cases or to exercise control over property of our bankruptcy estate, unless and until the Bankruptcy Court modifies or lifts the automatic stay as to any such claim (the "Automatic Stay"). Notwithstanding the general application of the Automatic Stay described above and other protections afforded by the Bankruptcy Code, governmental authorities may determine to continue actions brought under their police and regulatory powers.
Nasdaq Delisting
On April 17, 2026, the Company received a written notice (the "Nasdaq Notice") from the Listing Qualifications Staff of The Nasdaq Stock Market LLC ("Nasdaq") notifying the Company, pursuant to Nasdaq Listing Rules 5101, 5110(b) and IM-5101-1, of its determination to delist the Company's Series A common stock (Nasdaq: QVCAQ) and 8.0% Series A Cumulative Redeemable Preferred Stock (Nasdaq: QVCPQ) (collectively, the "QVC Group Listed Securities") from Nasdaq. Pursuant to the Nasdaq Notice, Nasdaq's determination was based on (i) the filing of the Chapter 11 Cases and associated public interest concerns raised thereby, (ii) concerns regarding the residual equity interest of existing listed securities holders and (iii) concerns about the Company's ability to sustain compliance with all requirements for continued listing on Nasdaq.
Pursuant to the Nasdaq Notice, trading of the QVC Group Listed Securities was suspended at the opening of business on April 24, 2026, and Nasdaq filed a Form 25-NSE with the Securities and Exchange Commission ("SEC"), which removed the QVC Group Listed Securities from listing and registration on Nasdaq. The Company did not appeal Nasdaq's delisting determination pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 Series.
In accordance with Rule 12d2-2 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the deregistration of our shares of capital stock under Section 12(b) of the Exchange Act will become effective 90 days after the date the Form 25-NSE is filed (which was filed on June 8, 2026). As a result, the QVC Group Listed Securities commenced trading on the OTCID Basic Market, effective April 24, 2026.
Separately, on April 17, 2026, the Company was notified by OTC Markets Group that, due to the Company's bankruptcy filing, the Company's Series B common stock (OTCQB: QVCGQ) was moved from the OTCQB Venture Market to the OTCID Basic Market, effective prior to market open on April 20, 2026. The downgrade to the OTCID Basic Market reflects the Company's current status under the Bankruptcy Code and does not affect the Company Parties' business operations or the Chapter 11 Cases.
New York Stock Exchange Delisting
On April 17, 2026, QVC received a delisting notice from New York Stock Exchange ("NYSE") notifying QVC, as a result of the Chapter 11 Cases and in accordance with NYSE Listed Company Manual Section 802.01D, of its determination to delist the 2067 Notes and 2068 Notes from NYSE, and suspend trading of the 2067 Notes and 2068 Notes
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on NYSE. Following the suspension of trading on NYSE, the 2067 Notes and 2068 Notes were quoted on the Pink Limited Market. The over-the-counter markets are significantly more limited than NYSE.
NYSE filed a Form 25 for QVC on May 4, 2026 in connection with the delisting of QVC's 2067 Notes and 2068 Notes from NYSE and the delisting became effective April 24, 2026. In accordance with Rule 12d2-2 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the deregistration of QVC's 2067 Notes and 2068 Notes under Section 12(b) of the Exchange Act will become effective 90 days after the date the Form 25-NSE is filed.
Strategies and Challenges
As noted above in Part I, Item 2 under "Overview", on the Petition Date, commencing the Chapter 11 Cases constituted an event of default that accelerated the Company Parties' respective obligations under the Debt Instruments. The Credit Agreement and the QVC Notes provide that, as a result of the Chapter 11 Cases, the principal and interest due thereunder shall be immediately due and payable. The exchangeable senior debentures provide that the amount accelerated is the greater of (x) the current principal amount of the exchangeable senior debentures or (y) the market value of the reference shares, plus all accrued and unpaid interest and all pass-through distributions due with respect to the reference shares shall be immediately due and payable. Any efforts to enforce such payment obligations under the Debt Instruments will be automatically stayed as a result of the Chapter 11 Cases, and the stakeholders' rights of enforcement in respect of the Debt Instruments will be subject to the applicable provisions of the Bankruptcy Code, including the Automatic Stay.
Although the Bankruptcy Court entered an order confirming the Financial Restructuring in accordance with the terms set forth in the Plan, there can be no assurance that the Company will satisfy the remaining conditions to emergence under the Plan or complete the Financial Restructuring on the terms set forth in the Plan, on different terms, or at all. Therefore, there remains substantial doubt about the Company's ability to continue as a going concern.
On November 14, 2024, QVC announced the WIN strategy, targeting top-line growth through three central priorities: (i) 'Wherever She Shops' - aims to enhance customer interactions across diverse platforms; (ii) 'Inspiring People & Products' - fosters rich, engaging content experiences; and (iii) 'New Ways of Working' - emphasizes leveraging technology and process enhancements to streamline operations and fuel innovation. With the WIN strategy, QVC plans to broaden content outreach by creating dynamic, purpose-built experiences that resonate across social media and digital streaming channels. By optimizing production studios and fostering continuous improvement, QVC envisages content creation as an integrated, efficient process that adapts to various platforms without losing the essence of its brand. QVC aims to grow audiences and redefine shopping experiences, ensuring that it meets its customers wherever they are while building on its heritage for sustained success.
On January 29, 2025, the Company announced the consolidation of its QVC and HSN operations at QVC's Studio Park location in West Chester, PA and the closing of the St. Petersburg, FL campus. The consolidation is part of QVC's organizational and strategic changes intended to support its WIN strategy. As a result, QVC accelerated depreciation related to the closure of the St. Petersburg, FL campus, which was completed as of September 30, 2025. The Company recorded $15 million and $29 million of incremental depreciation for the three and six months ended June 30, 2025, respectively, related to the St. Petersburg closure. On March 27, 2025, QVC announced a plan to reorganize teams across the Company as part of the WIN strategy, which is intended to increase revenue through growth initiatives while maintaining Adjusted OIBDA margin. As a result of the reorganization, QVC recorded $36 million and $21 million of restructuring costs at QxH and QVC International, respectively, during the six months ended June 30, 2025, in the condensed consolidated statement of operations.
In September 2025, QVC entered into agreements to sell the St. Petersburg properties to independent third parties, and two of these property sales closed in December 2025. As of June 30, 2026, the remaining long-lived assets of $17 million, all within QxH, were included in assets held for sale noncurrent in the condensed consolidated balance sheet. The sale of the remaining property is expected to be completed by the end of 2026.
Trends
QVC's future net revenue will depend on its ability to grow through digital platforms, retain and grow revenue from existing customers, and attract new customers. QVC's future net revenue may also be affected by (i) the willingness of cable television and direct-to-home satellite system operators to continue carrying QVC's programming service; (ii) QVC's ability to maintain favorable channel positioning, which may become more difficult due to governmental action or from distributors converting analog customers to digital; (iii) changes in television viewing habits because of video-on-demand
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technologies and internet video services; (iv) QVC's ability to source new and compelling products; and (v) general economic conditions.
The current economic uncertainty in various regions of the world in which our subsidiaries and affiliates operate has impacted and could continue to adversely affect demand for our products and services since a substantial portion of our revenue is derived from discretionary spending by individuals, which typically falls, to varying degrees, during times of economic instability and inflationary pressures. Economic tensions and changes and uncertainty relating to international trade policies, including, for example, the recent widespread tariffs announced by the U.S. on its major trading partners, higher tariffs on imported goods and materials, actions taken in response (such as retaliatory tariffs or other trade protectionist measures or the renegotiation of free trade agreements), have increased inflationary cost pressures and recessionary fears. In February 2026, the U.S. Supreme Court struck down the sweeping tariffs that the U.S. government had imposed through the executive orders issued pursuant to the International Emergency Economic Powers Act. Shortly thereafter, the U.S. government issued a series of orders to comply with the ruling, while also announcing new temporary tariffs for a 150 day period beginning February 24, 2026. On July 23, 2026, the U.S. government announced new tariffs replacing the temporary tariffs upon expiration. Tariffs and international trade arrangements may continue to change, potentially without warning and to an extent or duration that is difficult to predict. The ultimate availability, timing, and amount of any potential refunds remain uncertain and are subject to further legal and regulatory developments. Global financial markets have experienced and may continue to experience disruptions, including increased volatility and diminished liquidity and credit availability. If economic and financial market conditions in the U.S. or other key markets, including Europe and Japan, continue to be uncertain or deteriorate, QVC's customers may respond by further suspending, delaying or reducing their discretionary spending. Any further suspension, delay or reduction in discretionary spending could adversely affect revenue. Accordingly, our ability to increase or maintain revenue and earnings could be adversely affected to the extent that relevant economic environments decline. Such weak economic conditions may also inhibit QVC's expansion into new European and other markets. We currently are unable to predict the extent of any of these potential adverse effects.
The Company has continued to see inflationary pressures during the period including higher wages and merchandise costs consistent with inflation experienced by the global economy. The full impact of recent governmental actions on macroeconomic conditions and on QVC's business is uncertain, difficult to predict and depends on a number of factors, including the possible eligibility for refunds of previously paid tariffs, extent and duration of tariffs, changes in the amount and scope of tariffs, the imposition of new tariffs and other measures that target countries may take in response to U.S. trade policies, and possible resulting general inflationary pressures in the global economy, as well as the availability and cost of alternative sources of supply for merchandise. If these pressures persist, inflated costs may result in certain increased costs outpacing our pricing power in the near term.
Results of Operations-Consolidated
General. We provide in the tables below information regarding our consolidated Operating Results and Other Income and Expense, as well as information regarding the contribution to those items from our principal reporting segments. The "Corporate and other" category includes corporate activity along with various equity investments. For a more detailed discussion and analysis of the financial results of the principal reporting segments, see "Results of Operations-Businesses" below.
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Operating Results
Three months ended June 30, Six months ended June 30,
2026 2025 2026 2025
amounts in millions
Total revenue, net
QxH $ 1,216 1,391 2,447 2,759
QVC International 549 593 1,087 1,130
CBI 233 252 421 452
Consolidated QVC Group $ 1,998 2,236 3,955 4,341
Operating income (loss)
QxH $ 22 (2,334) 32 (2,334)
QVC International 40 62 86 91
CBI 11 10 (4) (1)
Corporate and other (22) (10) (48) (14)
Consolidated QVC Group $ 51 (2,272) 66 (2,258)
Adjusted OIBDA
QxH $ 99 150 191 272
QVC International 53 75 102 138
CBI 19 17 10 13
Corporate and other (8) (4) (14) (8)
Consolidated QVC Group $ 163 238 289 415
Total revenue, net. Consolidated QVC Group total revenue, net decreased 10.6% or $238 million and 8.9% or $386 million for the three and six months ended June 30, 2026, respectively, declining in all segments as compared to the corresponding period in the prior year. See "Results of Operations-Businesses" below for a more complete discussion of the results of operations of QVC and CBI.
Operating income (loss). Our consolidated operating income (loss) increased $2,323 million and $2,324 million for the three and six months ended June 30, 2026, respectively, as compared to the corresponding period in the prior year.
For the three months ended June 30, 2026, operating income (loss) increased $2,356 million at QxH and $1 million at CBI. The increase in operating income (loss) at QxH was primarily due to the impairment of goodwill and tradenames recorded during the second quarter of 2025. For the three months ended June 30, 2026, operating income (loss) decreased $22 million at QVC International and $12 million for Corporate and other. The decrease in operating income (loss) at Corporate and other was primarily due to pre-petition charges for the three months ended June 30, 2026 relating to legal, financial advisors, and other professional fees incurred in connection with the Chapter 11 Cases.
For the six months ended June 30, 2026, operating income (loss) increased $2,366 million at QxH, primarily due to the impairment of goodwill and tradenames recorded during the second quarter of 2025. For the six months ended June 30, 2026, operating income (loss) decreased $5 million at QVC International, $3 million at CBI, and $34 million for Corporate and other. The Corporate and other operating loss increase is due to pre-petition charges for the six months ended June 30, 2026 relating to legal, financial advisors, and other professional fees incurred in connection with the Chapter 11 Cases. See "Results of Operations-Businesses" below for a more complete discussion of the results of operations of QVC and CBI.
Adjusted Operating Income Before Depreciation and Amortization ("OIBDA"). To provide investors with additional information regarding our financial results, we also disclose Adjusted OIBDA, which is not a U.S. Generally Accepted Accounting Principles ("GAAP") financial measure. We define Adjusted OIBDA as operating income (loss) plus depreciation and amortization, stock-based compensation, and where applicable, separately identified impairments, litigation settlements, restructuring (benefits) costs, pre-petition charges (primarily professional fees directly related to, and incurred prior to, the filing of the Chapter 11 Cases), and (gain) loss on sale of assets. Our Chief Operating Decision Maker and management team use this measure of performance in conjunction with other measures to evaluate our businesses and
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make decisions about allocating resources among our businesses. We believe this is an important indicator of the operational strength and performance of our 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 us to view operating results, perform analytical comparisons and benchmarking between businesses and identify strategies to improve performance. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income, net earnings (loss), cash flows provided by operating activities and other measures of financial performance prepared in accordance with GAAP.
The following table provides a reconciliation of Operating income (loss) to Adjusted OIBDA:
Three months ended June 30, Six months ended June 30,
2026 2025 2026 2025
amounts in millions
Operating income (loss) - GAAP $ 51 (2,272) 66 (2,258)
Depreciation and amortization 79 105 159 207
(Gain) loss on sale of assets - - (10) -
Pre-petition charges 33 6 74 6
Stock-based compensation - 4 - 8
Impairment of intangible assets - 930 - 930
Impairment of goodwill - 1,465 - 1,465
Restructuring (benefits) costs (note 9) - - - 57
Adjusted OIBDA - non-GAAP $ 163 238 289 415
Consolidated Adjusted OIBDA decreased 31.5% or $75 million and 30.4% or $126 million for the three and six months ended June 30, 2026, respectively, as compared to the corresponding period in the prior year.
For the three months ended June 30, 2026, Adjusted OIBDA decreased $51 million at QxH, $22 million at QVC International, and $4 million within Corporate and other. For the three months ended June 30, 2026, Adjusted OIBDA increased $2 million at CBI. Adjusted OIBDA within Corporate and other decreased primarily due to higher consulting expenses.
For the six months ended June 30, 2026, Adjusted OIBDA decreased $81 million at QxH, $36 million at QVC International, and $3 million at CBI. Additionally, Adjusted OIBDA within Corporate and other decreased $6 million primarily due to higher consulting expenses. See "Results of Operations-Businesses" below for a more complete discussion of the results of operations of QVC and CBI.
Other income (expense)
Components of Other income (expense) are presented in the table below.
Three months ended June 30, Six months ended June 30,
2026 2025 2026 2025
amounts in millions
Reorganization items, net $ (49) - (49) -
Interest expense (26) (117) (158) (229)
Interest and dividend income 12 7 24 15
Realized and unrealized gains (losses) on financial instruments, net 8 (21) 87 (36)
Other, net - (8) 1 (6)
Other income (expense) $ (55) (139) (95) (256)
Reorganization items, net. We incurred net charges of $49 million for reorganization items during the three and six months ended June 30, 2026 in connection with the Chapter 11 Cases, as of or subsequent to the Petition Date. These costs primarily relate to professional fees incurred in connection with the Chapter 11 Cases, write-offs of deferred financing
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costs and debt discounts, and the adjustment to record the exchangeable senior debentures to the allowed claim amount, partially offset by the recognition of previously unrecognized gains relating to the exchangeable senior debentures. See Item 1, Note 5 "Assets and Liabilities Measured at Fair Value" to the accompanying condensed consolidated financial statements.
Interest expense. Interest expense decreased $91 million and $71 million for the three and six months ended June 30, 2026, respectively, as compared to the corresponding period in the prior year, primarily due to ceasing the recognition of interest expense beginning on the Petition Date as a result of the Chapter 11 Cases. See Item 1, Note 2 "Chapter 11 Proceedings" to the accompanying condensed consolidated financial statements.
Interest and dividend income. Interest and dividend income increased $5 million and $9 million for the three and six months ended June 30, 2026, respectively, compared to the same period in the prior year, primarily due to increases in invested cash balances during the year, partially offset by lower interest rates on invested cash balances compared to the prior year.
Realized and unrealized gains (losses) on financial instruments, net. Realized and unrealized gains (losses) on financial instruments, net are comprised of changes in the fair value of the following:
Three months ended June 30, Six months ended June 30,
2026 2025 2026 2025
amounts in millions
Equity securities $ - (1) (6) (1)
Exchangeable senior debentures 8 (20) 93 (35)
$ 8 (21) 87 (36)
For the three months ended June 30, 2026, the change in realized and unrealized gains (losses) on financial instruments, net is primarily due to changes in market factors largely driven by changes in the fair value of the underlying stocks or financial instruments to which these related. For the six months ended June 30, 2026, the changes in realized and unrealized gains (losses) on financial instruments, net are primarily due to recognition of $75 million of previously unrecognized gains related the retirement of a portion of the 4.0% and 3.75% Exchangeable Senior Debentures and changes in market factors largely driven by changes in the fair value of the underlying stocks or financial instruments to which these related (see Item 1, Note 7 "Debt" to the accompanying condensed consolidated financial statements for additional discussion related to debt).
Other, net. Other, net increased $8 million and $7 million for the three and six months ended June 30, 2026, respectively, compared to the corresponding period in the prior year, due to tax sharing expenses recognized in the prior year.
Income taxes. Earnings (loss) before income taxes, income tax (expense) benefit, and the effective tax rates for the three and six months ended June 30, 2026 and 2025 are summarized below:
Three months ended June 30, Six months ended June 30,
2026 2025 2026 2025
amounts in millions
Earnings (loss) before income taxes $ (4) (2,411) (29) (2,514)
Income tax (expense) benefit $ (26) 202 (41) 214
Effective tax rate1
N/M 8 % N/M 9 %

(1) Not meaningful
The income tax expense for the three months and six months ended June 30, 2026 differs from the U.S. statutory tax rate of 21% primarily due to permanent differences and foreign taxes. The income tax benefit for the three months and six months ended June 30, 2025 differs from the U.S. statutory tax rate of 21% primarily due to permanent differences, foreign taxes and an impairment of goodwill that is not deductible for tax purposes.
For the three and six months ended June 30, 2026, the Company utilized the discrete effective tax rate method, treating the year-to-date period as if it was the annual period to calculate its interim income tax provision, as allowed by Financial Accounting Standards Board Accounting Standards Codification 740-270-30-18, Income Taxes - Interim Reporting which management determined to be more appropriate than the annual effective rate method.
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Net earnings (loss). We had net losses of $30 million and $2,209 million for the three months ended June 30, 2026 and 2025, respectively, and net losses of $70 million and $2,300 million for the six months ended June 30, 2026 and 2025, respectively. The change in net earnings (loss) was the result of the above-described fluctuations in our revenue, expenses and other gains and losses.
Material Changes in Financial Condition
Seasonality
Our businesses are seasonal due to a higher volume of sales in the fourth calendar quarter related to year-end holiday shopping. In recent years, QVC has earned, on average, between 23% and 24% of our revenue in each of the first three quarters of the year and between 29% and 30% of our revenue in the fourth quarter of the year.
Financial Position, Liquidity and Capital Resources
As of June 30, 2026, substantially all of our cash and cash equivalents are invested in U.S. Treasury securities, securities of other government agencies, AAA rated money market funds and other highly rated financial and corporate debt instruments.
The following are potential sources of liquidity: available cash balances, dividend and interest receipts, proceeds from asset sales, and cash generated by the operating activities of our wholly-owned subsidiaries. Cash generated by the operating activities of our subsidiaries is only a source of liquidity to the extent such cash exceeds the working capital needs of the subsidiaries and is not otherwise restricted.
QVC entered into a $300 million DIP LC facility with JPMorgan Chase Bank, N.A., as agent, to issue new letters of credit and roll existing letters of credit to support operations during the pendency of the Chapter 11 Cases, cash collateralized by $315 million deposited in a cash collateral account recorded as restricted cash within other current assets in our condensed consolidated balance sheets; commitments under the DIP LC facility would expire upon the earliest of (i) six months from the Petition Date, (ii) the Effective Date and (iii) the occurrence of an event of default, all as more fully set forth in such DIP LC facility Term Sheet attached as Exhibit D to the Restructuring Support Agreement, and subject to Bankruptcy Court approval pursuant to interim and final DIP orders. Letters of credit availability under the DIP LC at June 30, 2026, was approximately $33 million. See Item 1, Note 2 "Chapter 11 Proceedings" for additional discussion on the DIP LC.
Under both the Credit Agreement and the indentures governing the QVC Notes, QVC is permitted to make unlimited dividends to service the debt of its parent entities so long as it is not in default under those agreements and to make certain restricted payments to QVC Group under an intercompany tax sharing agreement (the "Tax Agreement") in respect of certain tax obligations of QVC and its subsidiaries. As a result of the breach of financial covenant under the Credit Agreement and the Chapter 11 Cases, QVC is no longer permitted to make unlimited dividends to service the debt of its parent entities to QVC Group. QVC can continue to make certain restricted payments to QVC Group under the Tax Agreement in respect of certain tax obligations of QVC and its subsidiaries.
Following the commencement of the Chapter 11 Cases, rating agencies have downgraded QVC's credit ratings. These downgrades have adversely affected, and are expected to continue to adversely affect, the market prices of its debt securities and QVC Group's equity securities, its access to capital, or trigger additional collateral or funding requirements or the imposition of financial or other burdensome covenants.
Although the Bankruptcy Court confirmed the Plan on July 20, 2026, the Plan remains subject to the satisfaction or waiver of certain conditions precedent to the Effective Date, and there can be no assurance as to the timing of emergence or that such conditions will be satisfied; the Company's liquidity, capital structure, and financial reporting (including the potential application of fresh-start accounting) may be materially affected by the timing and manner of the Company's emergence from Chapter 11.
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As of June 30, 2026, QVC Group's liquidity position included the following:
Cash and cash
equivalents
amounts in millions
QVC $ 1,019
CBI 92
Corporate 256
Total QVC Group $ 1,367
To the extent that the Company recognizes any taxable gains from the sale of assets we may incur tax expense and be required to make tax payments, thereby reducing any cash proceeds.
As of June 30, 2026, the Company had approximately $393 million of cash, cash equivalents and restricted cash held in foreign subsidiaries that is available for domestic purposes with no significant tax consequences upon repatriation to the U.S. QVC accrues foreign taxes on the unremitted earnings of its international subsidiaries. Approximately 29% of QVC's foreign cash balance was that of QVC's Japanese operations ("QVC-Japan"). QVC owns 60% of QVC-Japan and shares all profits and losses with the 40% minority interest holder, Mitsui & Co. LTD ("Mitsui").
Six months ended June 30,
2026 2025
amounts in millions
Cash Flow Information
Net cash provided (used) by operating activities $ (57) 26
Net cash provided (used) by investing activities $ (75) (167)
Net cash provided (used) by financing activities $ (30) 118
During the six months ended June 30, 2026, QVC Group's primary uses of cash were $88 million of capital and television distribution rights expenditures, $57 million for operating activities, and $16 million in dividend payments from QVC-Japan to Mitsui. These uses of cash were funded primarily with cash on hand as of December 31, 2025. As of June 30, 2026, QVC Group's cash, cash equivalents and restricted cash balance was $1,860 million.
Pursuant to the Plan, and following the approval of the Plan and the occurrence of the Plan Effective Date, the projected uses of QVC's cash in the next year, outside of normal operating expenses (inclusive of tax payments), are the costs to service outstanding debt, payments to taxing authorities, potential capital improvement spending, payments related to television distribution rights, and potentially additional investments in existing or new businesses. The Company expects that cash on hand and cash provided by operating activities in future periods will be sufficient to fund projected uses of cash, except for any principal amounts of the Debt Instruments that become accelerated as a result of the Chapter 11 Cases, as described above. Additionally, as a result, there remains substantial doubt about the Company's ability to continue as a going concern.
On May 23, 2025, the Board of Directors announced its decision to suspend payment of the quarterly cash dividend on the Preferred Stock, beginning with the quarterly cash dividend payable on June 16, 2025. As a result of the non-payment of the quarterly cash dividend, the dividend rate increased from 8.0% to 9.5%.
Subject to Bankruptcy Court approval and the terms of the Restructuring Support Agreement and the Plan, the Company may from time to time repurchase any level of its outstanding debt through open market purchases, privately negotiated transactions, redemptions, tender offers or otherwise. Repurchases or retirement of debt, if any, will depend on prevailing market conditions, liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.
Results of Operations-Businesses
QVC. QVC is a retailer of a wide range of consumer products, which are marketed and sold primarily by merchandise-focused televised shopping programs, the internet and mobile applications.
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In the U.S., QVC's televised shopping programs, including live and recorded content, are distributed across multiple channels nationally on a full-time basis, including QVC, QVC2, QVC3, HSN and HSN2. The Company's U.S. programming is also available on QVC.com and HSN.com, which we refer to as "QVC's U.S. websites"; its social platforms (including TikTok, Instagram and others), virtual multichannel video programming distributors (including Hulu + Live TV, DirecTV Stream, and YouTube TV); applications via streaming video (including Facebook Live, Roku, Apple TV, Amazon Fire, Xfinity Flex and Samsung TV Plus); and mobile applications (collectively, the "Digital Platforms").
QVC's Digital Platforms enable consumers to purchase goods offered on its televised programming, along with a wide assortment of products that are available only on QVC's U.S. websites. QVC.com and its other Digital Platforms (including its mobile applications, social media pages and others) are natural extensions of its business model, allowing customers to engage in its shopping experience wherever they are, with live or on-demand content customized to the device they are using. In addition to offering video content, QVC's U.S. websites allow shoppers to browse, research, compare and perform targeted searches for products, read customer reviews, control the order-entry process and conveniently access their account.
Internationally, QVC's televised shopping programs, including live and recorded content, are distributed to households outside the U.S., primarily in Japan, Germany, the U.K. and Italy. In some of the countries where QVC operates, QVC's televised shopping programs are distributed across multiple QVC channels: QVC Style and QVC2 in Germany and QVC Beauty, QVC Extra and QVC Style in the U.K. Similar to the U.S., QVC's international businesses also engage customers via websites, mobile applications, and social media pages. QVC's international business employs product sourcing teams who select products tailored to the interests of each local market.
QVC-Japan operations are conducted through a joint venture with Mitsui. QVC-Japan is owned 60% by QVC and 40% by Mitsui. QVC and Mitsui share in all profits and losses based on their respective ownership interests. QVC-Japan paid dividends to Mitsui of $16 million and $22 million, during the six months ended June 30, 2026 and 2025, respectively.
QVC's operating results were as follows:
Three months ended June 30, Six months ended June 30,
2026 2025 2026 2025
amounts in millions
Total revenue, net $ 1,765 1,984 3,534 3,889
Cost of goods sold (excluding depreciation and amortization) (1,164) (1,281) (2,344) (2,552)
Operating expenses (135) (154) (272) (308)
Advertising expenses (86) (78) (164) (141)
Selling, general and administrative expenses (excluding stock-based compensation, advertising, and pre-petition charges) (228) (246) (461) (478)
Adjusted OIBDA 152 225 293 410
Depreciation and amortization (71) (98) (145) (193)
Gain (loss) on sale of assets - - 10 -
Pre-petition charges (19) - (40) -
Stock-based compensation - (4) - (8)
Impairment of intangible assets - (930) - (930)
Impairment of goodwill - (1,465) (1,465)
Restructuring benefits (costs) (note 9) - - - (57)
Operating income (loss) $ 62 (2,272) 118 (2,243)
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Total revenue, net was generated from the following geographical areas:
Three months ended June 30, Six months ended June 30,
2026 2025 2026 2025
amounts in millions
QxH $ 1,216 1,391 2,447 2,759
QVC International 549 593 1,087 1,130
Consolidated QVC $ 1,765 1,984 3,534 3,889
Total Revenue, net. QVC's consolidated total revenue, net decreased $219 million or 11.0% and $355 million or 9.1% for the three and six months ended June 30, 2026, respectively, as compared to the corresponding period in the prior year. In constant currency, QVC's consolidated total revenue, net decreased $204 million or 10.3% and $366 million or 9.4% for the three and six months ended June 30, 2026 as compared to the corresponding periods in the prior year.
For the three months ended June 30, 2026, QVC's consolidated total revenue, net, in constant currency, decreased 7.8% as a result of lower units shipped attributable to QxH and 3.5% driven by a decrease in average selling price per unit ("ASP"). These decreases to total revenue, net were partially offset by a $41 million decrease in estimated product returns primarily at QxH and, to a lesser extent, QVC International. QVC's consolidated total revenue, net, in constant currency, for the six months ended June 30, 2026 decreased 9.0% as a result of lower units shipped attributable to QxH and 1.7% driven by a decrease in ASP attributable to QVC International, partially offset by an $87 million decrease in estimated product returns primarily at QxH and, to a lesser extent, QVC International.
During the three and six months ended June 30, 2026 and 2025, the changes in revenue and expenses were affected by changes in the currency exchange rates for the Euro, the Japanese Yen, and the U.K. Pound Sterling. In the event the U.S. Dollar strengthens against these foreign currencies in the future, QVC's revenue and operating cash flow will be negatively affected.
In discussing QVC's operating results, the term "currency exchange rates" refers to the foreign currency exchange rates QVC uses to convert the operating results for all countries where the functional currency is not the U.S. Dollar. QVC calculates the effect of changes in currency exchange rates as the difference between current period activity translated using the prior period's currency exchange rates. QVC refers to the results of this calculation as the impact of currency exchange rate fluctuations. Constant currency operating results are non-GAAP financial measures that refer to operating results without the impact of the currency exchange rate fluctuations. The disclosure of results in constant currency permits investors to better understand QVC's underlying performance without the effects of currency exchange rate fluctuations by facilitating period-over-period comparisons of operational performance independent of movements in exchange rates that are beyond management's control. Management uses the constant currency information internally in conjunction with other financial measures, including revenue, Adjusted OIBDA and other performance metrics reviewed by the CODM, to evaluate the operating performance of QVC's international operations, allocate resources among segments, and assess the effectiveness of operational strategies.
The percentage change in total revenue, net for each of QVC's segments in U.S. Dollars and in constant currency was as follows:
Three months ended June 30, 2026 Six months ended June 30, 2026
U.S. Dollars Foreign Currency Exchange Impact Constant Currency U.S. Dollars Foreign Currency Exchange Impact Constant currency
QxH (12.5) % - % (12.5) % (11.3) % - % (11.3) %
QVC International (7.4) % (2.5) % (4.9) % (3.8) % 1.0 % (4.8) %
For the three months ended June 30, 2026, QxH's total revenue, net declined $175 million or 12.5%. Total revenue, net decreased 11.6% as a result of lower units shipped and 2.3% driven by a decrease in ASP. This decline was partially offset by a $35 million decrease in estimated product returns. For the six months ended June 30, 2026, QxH's total revenue, net declined $312 million or 11.3%. Total revenue, net decreased 12.4% as a result of lower units shipped. This decline was partially offset by a $76 million decrease in estimated product returns. ASP for the six months ended June 30, 2026 remained relatively flat with prior year.
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For the three months ended June 30, 2026, QVC International's total revenue, net declined $29 million, or 4.9% in constant currency. Total revenue, net, in constant currency, decreased 6.3% driven by a decrease in ASP attributable to all markets. This decline was partially offset by an increase in units shipped and a $6 million decrease in estimated product returns attributable to all markets. The increase in units shipped was attributable to an increase in Japan, which was partially offset by declines in all other markets. For the six months ended June 30, 2026, QVC International's total revenue declined $54 million, or 4.8% in constant currency. Total revenue, net, in constant currency, decreased 4.8% driven by a decrease in ASP attributable to all markets. This decline was partially offset by an $11 million decrease in estimated product returns attributable to all markets and $11 million in favorable exchange rates.
Cost of goods sold (excluding depreciation and amortization). QVC's cost of goods sold (excluding depreciation and amortization) as a percentage of total revenue, net was 65.9% and 66.3% for the three and six months ended June 30, 2026, respectively, compared to 64.6% and 65.6% for the three and six months ended June 30, 2025. The increase in cost of goods sold as a percentage of revenue for the three and six months ended June 30, 2026 was due to higher inventory obsolescence expense at QxH and unfavorable product margin at QxH due to the mix of products sold.
Operating expenses. QVC's operating expenses are principally comprised of commissions, order processing and customer service expenses, credit card processing fees and TV distribution expenses. Operating expenses were 7.6% and 7.7% of total revenue, net for the three and six months ended June 30, 2026, respectively, compared to 7.8% and 7.9% of total revenue, net for the three and six months ended June 30, 2025. The decreases as a percentage of total revenue, net were driven by lower commissions, credit card processing fees, and personnel costs.
Advertising expenses. QVC's advertising expenses increased $8 million or 10.3% for the three months ended June 30, 2026, as compared to the corresponding period in the prior year. QVC's advertising expenses increased $23 million or 16.3% for the six months ended June 30, 2026, as compared to the corresponding period in the prior year. The increase was primarily driven by marketing investments on social and streaming platforms at QxH.
Selling, general and administrative expenses (excluding stock-based compensation, advertising, and pre-petition charges). QVC's selling, general, and administrative expenses (excluding stock-based compensation, advertising, and pre-petition charges) include personnel, information technology, production costs and the provision for doubtful accounts. Such expenses decreased $18 million and increased 0.5% as a percentage of total revenue, net for the three months ended June 30, 2026, as compared to the corresponding period in the prior year. The decrease in expense for the three months ended June 30, 2026 was primarily driven by a decrease in personnel costs due to the reorganization of teams across the Company as part of the WIN strategy and lower production costs.
QVC's selling, general, and administrative expenses (excluding stock-based compensation, advertising, and pre-petition charges) decreased $17 million and increased 0.7% as a percentage of total revenue, net for the six months ended June 30, 2026, as compared to the corresponding period in the prior year. The decrease in expense for the six months ended June 30, 2026, was primarily driven by a decrease in personnel costs due to the reorganization of teams across the Company as part of the WIN strategy and lower production costs, partially offset by an increase in consulting costs.
Depreciation and amortization. Depreciation and amortization decreased $27 million and $48 million for the three and six months ended June 30, 2026, compared to the same period in the prior year. The decrease in depreciation for both periods was primarily due to the St. Petersburg, FL campus and associated assets that are held for sale including $15 million and $29 million of accelerated depreciation recorded during the three and six months ended June 30, 2025, respectively. The decrease in software amortization for both periods was primarily due to software assets that fully amortized during 2025.
(Gain) loss on sale of assets. QVC recorded a $10 million gain on sale of assets for the six months ended June 30, 2026 primarily related to the sale of a property in Germany.
Pre-petition charges. Pre-petition charges consist primarily of professional fees related to, and incurred prior to, the filing of Chapter 11 Cases. QVC recorded $19 million and $40 million of pre-petition charges for the three and six months ended June 30, 2026, respectively. These charges relate to legal, financial advisors, and other professional fees incurred in connection with the Chapter 11 Cases.
Stock-based compensation. Stock-based compensation includes compensation related to options and restricted stock units granted to certain employees, directors and officers. QVC recorded $4 million and $8 million of stock-based compensation expense for the three and six months ended June 30, 2025. As previously disclosed in the 2025 10-K, during the prior year the company canceled primarily all of the stock-settled and cash-settled RSU awards granted during 2025, resulting in no stock based compensation expense in 2026.
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Impairment of intangible assets. QVC recorded intangible assets impairments losses of $930 million for the three and six months ended June 30, 2025, related to the decrease in the fair value of the QVC and HSN tradenames as a result of quantitative assessments performed by the Company (refer to Part I, Note 6 "Intangible Assets").
Impairment of goodwill. QVC recorded goodwill impairment losses of $1,465 million for the three and six months ended June 30, 2025, related to a decrease in the fair value of the QxH reporting unit goodwill as a result of quantitative assessments performed by the Company (refer to Part I, Note 6 "Intangible Assets").
Restructuring (benefits) costs. For the six months ended June 30, 2025, QVC recorded $36 million and $21 million of restructuring costs at QxH and QVC International, respectively, resulting from the announced plan to reorganize its teams across the Company as part of the WIN strategy.
CBI. CBI consists of a portfolio of aspirational home and apparel brands. The home brands are comprised of Ballard Designs, Frontgate, and Grandin Road, with Garnet Hill primarily categorized as an apparel brand. There are 35 retail and outlet stores located throughout the U.S., primarily comprised of Ballard Designs and Frontgate stores in the U.S. that sell merchandise through brick-and-mortar retail locations as well as via the internet through their websites.
CBI's stand-alone operating results for the three and six months ended June 30, 2026 and 2025 were as follows:
Three months ended June 30, Six months ended June 30,
2026 2025 2026 2025
amounts in millions
Total revenue, net $ 233 252 421 452
Cost of goods sold (excluding depreciation and amortization) (129) (141) (237) (256)
Operating expenses (10) (10) (19) (19)
Advertising expenses (42) (45) (83) (84)
Selling, general and administrative expense (excluding stock-based compensation, advertising, and pre-petition charges) (33) (39) (72) (80)
Adjusted OIBDA 19 17 10 13
Depreciation and amortization (8) (7) (14) (14)
Operating income (loss) $ 11 10 (4) (1)
Total revenue, net. CBI's consolidated total revenue, net decreased 7.5% and 6.9% for the three and six months ended June 30, 2026, respectively, as compared to the corresponding period in the prior year. The decrease in total revenue, net for the three months ended June 30, 2026 was the result of a decrease in units shipped of 14.5%, partially offset by an increase in ASP of 8.1% compared to the same period in the prior year. The decrease in units shipped was due to reduced demand in the home and apparel categories. The decrease in total revenue, net for the six months ended June 30, 2026 was the result of a decrease in units shipped of 12.8%, partially offset by an increase in ASP of 6.8% compared to the same period in the prior year, primarily related to softness in the home category.
Cost of goods sold (excluding depreciation and amortization). CBI's cost of goods sold (excluding depreciation and amortization) as a percentage of total revenue, net was 55.4% and 56.0% for the three months ended June 30, 2026 and 2025, respectively, and 56.3% and 56.6% for the six months ended June 30, 2026 and 2025, respectively. In both periods the decreases in cost of goods sold as a percentage of total revenue, net in the period were due to higher product margins from the increase in ASP.
Operating expenses. Operating expenses are principally comprised of credit card processing fees and customer service expenses, which are variable expenses that support sales activity. CBI's operating expenses were 4.3% and 4.5% of total revenue, net for the three and six months ended June 30, 2026, respectively, compared to 4.0% and 4.2% for the three and six months ended June 30, 2025. Operating expenses remained flat as compared to the corresponding period in the prior year.
Advertising expenses. CBI recorded $42 million and $45 million of advertising expenses for the three months ended June 30, 2026 and 2025, respectively, for a $3 million or 6.7% decrease. The decrease for the three months ended June 30, 2026 was primarily driven by lower catalog expense. CBI recorded $83 million and $84 million of advertising expenses for
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the six months ended June 30, 2026 and 2025, respectively, for a $1 million or 1.2% decrease. The decrease for the six months ended June 30, 2026 was primarily driven by a strategic shift in the timing of the catalog circulation.
Selling, general and administrative expenses (excluding stock-based compensation, advertising, and pre-petition charges). CBI's SG&A expenses (excluding stock-based compensation, advertising, and pre-petition charges) include personnel costs and retail store operating expenses. Such expenses decreased $6 million and 15.4% for the three months ended June 30, 2026 as compared to the prior year, and decreased as a percentage of revenue, net from 15.5% to 14.2%. For the six months ended June 30, 2026, such expenses decreased $8 million and 10.0% as compared to the prior year, and decreased as a percentage of revenue, net from 17.7% to 17.1%. In both periods, the decreases in selling, general and administrative expenses are primarily due to lower consulting expenses.
Depreciation and amortization. CBI's total depreciation and amortization expense increased $1 million for the three months ended June 30, 2026. For the six months ended June 30, 2026, depreciation and amortization expense remained flat as compared to the corresponding period in the prior year.
Critical Accounting Estimates
The preparation of consolidated financial statements in conformity with GAAP requires QVC Group to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates under different assumptions or conditions. Estimates include, but are not limited to, retail-related adjustments and allowances, depreciable lives of fixed assets and internally developed software, and valuation of acquired intangible assets and goodwill. QVC Group bases its estimates on historical experience and on various other assumptions that QVC Group believes to be reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from those estimates under different assumptions or conditions. In addition, as circumstances change, QVC Group may revise the basis of its estimates accordingly.
There have been no significant changes to our critical accounting policies and estimates disclosed in our 2025 10-K.
QVC Group Inc. published this content on August 04, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on August 04, 2026 at 18:28 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]