Qurate Retail CEO on Q1 earnings, future of retail

Mike George, Qurate Retail, Inc. President & CEO, joins Yahoo Finance Live to discuss the company’s strong Q1 earnings and assess the outlook for retail amid the pandemic.

Video transcript

JULIE HYMAN: Shares of Qurate Retail are trading sharply higher today, up by about 13% or so at last check-- this after the company reported its first quarter adjusted operating income rose by 35%, revenue up by 14% to $3.3 billion. And this was the best quarter for the company since early 2018. That's when QVC merged with HSN and created Qurate.

The President and CEO Mike George is joining us now. Mike, definitely I think of it in the category of companies that has benefited as people have been at home-- shopping from home. Obviously, they were still shopping from home in the first quarter. But like everything else, I'm curious how you're thinking about the remainder of the year and how many of these trends are going to stay put.

MIKE GEORGE: Thanks. It's great to be with you. And we're very confident about the performance-- obviously, an outstanding quarter-- but also confident about the go-forward outlook. We think we benefit from a confident consumer who has savings and disposable income that she's been-- that she's been stuck at home, she's now ready to spend more, she's now ready to engage in fashion, and beauty, and other categories that have been more challenged during the pandemic.

So we think we see a confident consumer broadening her spend. And we don't think there's any going backward on this new, more digital lifestyle that consumers have embraced during the pandemic. So she's actively involved in online shopping, engaging in live stream shopping. We think that continues. So we like the set of assets we've put together-- brand, product, content, distribution, digital ecosystem. And we believe we can sustain a really healthy level of growth going forward.

BRIAN SOZZI: Mike, you're just the latest retailer-- there's been a few-- that have really posted impressive first quarter earnings. But I look at today's jobs report, and retail jobs declined 15,000 in April. That's surprising to me given how retail did in the first quarter. Explain to us why retailers are taking a cautious stance on hiring.

MIKE GEORGE: I was a little surprised by that number. And I think some of it actually reflects just the difficulty of getting the right labor in the right places. We've certainly been in a hiring mode. We're seeing with our strong growth, strong need for more team members in our fulfillment centers, as an example. And we're finding a lot of competition for talented team members. So I wouldn't read too much into this report.

I think we're in a good growth mode for the industry. We at the NRF were forecasting a 6.5% to 8% growth rate for the overall industry for the year. And I think the hiring will come along with that.

MYLES UDLAND: And, Mike, another part of your business-- or maybe another impact, I guess, on your business from fiscal policy would be how unemployment checks-- or the stimulus checks, I should say-- maybe did or did not feed through. We saw the dispersal of the last round-- probably the final round of stimulus checks-- in that first quarter. Any impact there and now have you thought about this savings pile that we also hear about from economists that customers are sitting on, as you guys think about the business going forward and through the other side of this?

MIKE GEORGE: You know, we really saw our business accelerate through the quarter. March was our strongest month. And I think that reflects a combination of factors. And part of it is what you mentioned. Part of it, I think, is this growing consumer confidence in general, but buoyed by the stimulus funds. We also think that was driven by the rebound of fashion.

So we've been really encouraged by how strongly fashion has rebounded after a very down year for the industry and for us in March. And so we think we see a confident consumer with more savings. Her savings are higher, but also her wealth through the stock market is higher, her wealth through her housing value is higher. And especially for our consumer who tends to be that above average income, above average household wealth consumer, she's in a relatively good place.

She's eager to spend more on things she has not been able to spend on in the past-- whether that's going out, traveling, and all the products you need for that. And we think we'll be the beneficiary of that pent-up demand.

BRIAN SOZZI: Mike, we've talked to you several times throughout the pandemic, and homegoods has been a top category for your company. But people are going back outside. What are they shopping for right now?

MIKE GEORGE: You know, it's a broad range right now. So to your point, in the prior periods of the pandemic, it was very concentrated on home and home sales-- home-related sales remain strong. Our cornerstone business, which is primarily focused in the home space, grew 40% in Q1, a really remarkable result-- all things culinary, gardening, home decor, home productivity.

But now what's exciting is she is now starting to shop for the rest of her life and for being able to go out more. So I mentioned the strong rebound that we're seeing in apparel. We're seeing strong performance across a number of beauty categories. We've seen, actually, healthy results in jewelry for the first time in a long time. So I think you have pent-up demand in those more fashion categories, a lot of upside opportunity as consumers start to replenish wardrobes in the coming months.

JULIE HYMAN: Mike, finally, it's jobs day, of course, and I'm curious what your hiring situation is like. Have you guys been doing a lot of hiring? Do you plan to? And along with that, are you having trouble filling jobs at all?

MIKE GEORGE: We are doing a lot of hiring, and we are having trouble filling jobs. Most of our hiring is in our fulfillment center network. So with this strong growth, as you would expect, it's need for that many more team members in our global fulfillment centers. And there's a lot of competition for those roles.

So we're in a hiring mode. We're certainly seeing some wage rate pressure. We want to be competitive with the market, make sure we take care of our team members, both in terms of market competitive wage rates, but also above market benefits. So we think we have a really good offering for our team members, and we're largely able to meet our hiring needs. But I think the demand for qualified workers is quite high right now.