Welcome to Qurate Retail 2022 Q3 earnings call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. At that time, if you have a question, please press star one on your telephone keypad. As a reminder, this conference is being recorded. November fourth. I would now like to turn the call over to Courtnee Chun, Chief Portfolio Officer. Please go ahead. Thank you. Before we begin, we'd like to remind everyone that this call includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in the most recent forms, Form 10-K and Form 10-Q, filed by our company and QVC with the SEC. These forward-looking statements speak only as of the date of this call, and Qurate Retail expressly disclaims any obligation or undertaking to disseminate any upgrades or revisions to any forward-looking statement contained herein to reflect any change in Qurate Retail's expectations with regard thereto, or any change in events, conditions, or circumstances on which any such statement is based. Please note that we have published slides to accompany the earnings release. On today's call, we will discuss certain non-GAAP financial measures, including adjusted OIBDA, adjusted OIBDA margin, free cash flow, and constant currency. Information regarding the comparable GAAP metrics, along with required definitions and reconciliations, including preliminary notes and schedules one through four, can be found in the earnings press release issued today or our earnings presentation, which are available on our website. Today, speaking on the earnings call, we have Qurate Retail President and CEO, David Rawlinson, Qurate Retail Group Interim CFO, James Hathaway, and Qurate Retail Executive Chairman, Greg Maffei. Now, I'll turn the call over to David Rawlinson. Thank you, Courtnee, and good morning to everyone. Thank you for joining us today and for your interest in Qurate Retail. Looking at our Q3 results, our performance was the result of several factors. Some of these are external, which we are managing through, like all are in retail, and some are internal, for which we are focused on driving better outcomes through improved execution and Project Athens. In laying out Project Athens in June, we said we expected fiscal 2022 to be the baseline year and that our transformation would not be linear. We made progress in Q3, moving from the assessment phase of Athens to in-depth planning. We expect to start seeing deep execution and impact on results in 2023. In the third quarter, total company revenue declined 9% in constant currency, a modest sequential moderation in the rate of decline from Q2, driven by better execution and easier compares. Like all in retail, we managed against macro headwinds, including inflation, continued war in Ukraine, and rising interest rates that negatively impacted consumer sentiment. In the U.S., the University of Michigan Consumer Sentiment Index declined 20% year-over-year in September 2022. We also faced several extraordinary events that impacted performance. Namely, we approached the death of Queen Elizabeth in the U.K. with respect, keeping our customers, team members, and the mood of the nation in mind. We stopped all programming for two and a half days following her passing and used airtime to pay tribute to the Queen. We estimate this period, coupled with the 10 days of mourning, impacted QVC UK sales by approximately $10 million. We also prioritized the safety of our HSN team members based in Florida during Hurricane Ian, switching to pre-recorded programming in lieu of live programming for four days, and we estimate its sales impact was approximately $3 -5 million in Q3. Total company Adjusted OIBDA declined 54% in Q3 in constant currency. This reflects approximately 100 basis points and lower product margins due to planned promotions as we work to reduce our inventory, particularly at HSN. Elevated inventory levels are pressuring margins across retail, and we're no different. We've begun taking action to move through excess inventory earlier than others in retail due to capacity constraints following the loss of our Rocky Mount facility. While this has pressured our margins year to date, it has improved our inventory position, as I'll discuss more shortly. Adjusted OIBDA also reflected sales deleverage and elevated costs. We continue to work through excess inventory amplified by impacts of the Rocky Mount fire, leading to high levels of detention and demurrage expenses, as well as inflationary pressures in shipping, fuel, packaging, labor rates, and marketing. We are also lapping the benefits of the price increases we took last year. Despite elevated costs, we elected not to raise prices this year, primarily due to the macroeconomic environment and consumer sentiment, but also to manage our promotional cadence as we took action to address excess inventory. That said, we have made progress on reducing inventory. We had excess inventory based on the retail and supply chain environment, but also compounded by the December 2021 tragic fire at our former Rocky Mount fulfillment center. We moved through a portion of this inventory in Q3 through clearance actions and receipt management. QxH inventory ended the quarter 5% lower than the prior year. We do expect inventory clearing actions to create margin pressure at least through the end of 2022. We are focused on our turnaround and have started to experience initial progress. One key area I'd like to highlight is attracting leadership talent to drive the transformation of the business. Scott Barnhart joined in late September as Chief Operating Officer. In this role, he leads supply chain procurement, global business services, and corporate real estate and workplace services for all Qurate brands globally, as well as customer service for all U.S. brands and fulfillment center operations for QVC US and HSN. Scott brings deep experience leading global retail supply chains for multiple Fortune 500 companies, including Cardinal Health, Aramark, and Conagra Brands. The COO role is new to Qurate Retail Group, and having a dedicated leader responsible for our supply chain and execution of our strategic plan is key to improving our performance. Soumya Sriraman joined as President of Streaming and leads our streaming commerce business. She is an experienced CEO and general manager with expertise and a proven track record of success building streaming businesses. Most recently, she led Amazon's Prime Video Channels business. Prior to that, she was founding CEO and President of BritBox, the first of its kind streaming video on-demand offering from the U.K.'s two national broadcasters, BBC and ITV. Streaming is an important future growth lever of our business. By adding Soumya Sriraman and her qualifications, we expect to meaningfully grow our audience and product sales on streaming platforms over time. Stacy Bowe joined as Chief Merchandising Officer of QVC US. She is developing and leading merchandise strategy across all platforms, as well as overseeing QVC's buying, planning, and programming organization and our design, development, and sourcing team, which is our in-house agency that brings new brands, products, and concepts to life. Stacy Bowe brings extensive merchandise experience and a proven ability to help omni-channel, multi-category retailers differentiate themselves, engage customers, and drive sales. Most recently, she led global e-commerce and digital marketing for G-III Apparel Group. She spent more than 20 years at Macy's, serving in a variety of executive leadership roles. Merchandise strategy and its integration with our programming is central to our business. Having a strong leader here will allow us to better serve our customers, attract new ones, and grow revenue. Lastly, Linda Aiello joined Qurate as Chief People Officer. She leads the full team member portfolio, including team member experience, talent management, diversity, equity, and inclusion. She brings more than 20 years of international experience leading people functions at modern technology businesses and luxury fashion brands. Most recently, she was Chief People Officer at Stitch Fix. Prior to Stitch Fix, Linda served in senior people roles at Salesforce and Uber. We are only as good as the people who come to work every day and the culture we create. Adding a senior people leader with Linda's proven background will contribute to attracting and retaining the talent and building the culture we need to transform the business. On this topic, team member engagement and morale are critical in a turnaround for us to deliver Project Athens. I'm pleased to report that Qurate Retail Group earned a 2022 U.S. Great Place to Work certification, the global authority on workplace culture and employee experience. In addition, our own internal surveys revealed meaningful gains in our team member engagement and confidence in the company strategy and leadership. Now I'll provide updates on the five pillars of Project Athens that we communicated in late June, where we are pleased to see initial traction. First, from an overall perspective, we formed a transformation office to work with the teams for successful execution of Project Athens. The office is led by Scott Barnhart, our new COO. Reporting into Scott is a dedicated Chief Transformation Officer, Bill Hunter, who has been with the company for 14 years and is singularly focused on delivering our strategic initiatives. Pillar one of Project Athens is focused on improving the customer experience and growing these relationships. The presidents of QVC US and HSN have been in their positions for about 8 months. We experienced a moderation in the rates of decline for QxH customer count from the first half of 2022. Total QxH customer count declined 11% in Q3 versus mid-teens in the first half of 2022. While total count declined, the average spend per customer increased 3% and the average number of items per customer increased 6% in Q3. Customers remain engaged with total minutes viewed up 8% in Q3, which was slightly stronger than Q1 and Q2. With better execution and an improved merchandise portfolio, we will be better suited to serve our engaged audience. Pillar two is all about improving execution of our core processes. In July, we began putting the today and the special back in Today's Special Value and today's special by shortening their availability to only one day and offering our best price for that day, driving a greater sense of urgency. In Q3, we experienced a moderation in the rate of decline in TSV performance. We also experienced fewer shifts of our Today's Special Value in Q3 versus the first half of the year. QVC US shifted 36% of its TSVs in Q3, down from 50% in Q1 and 75% in Q2. HSN shifted 40% of its TSVs in Q3, down from 60% in Q1 and Q2. Pillar three is about lowering our cost to serve. We experienced meaningful cost pressures in Q3, some from external macro factors, inflation and excess inventory, and some from sales deleverage, and some from our investments. We are intently focused on removing costs from our business, and we'll have more to share on that in the future. For today, I'll simply reassert the point we made when we unveiled Project Athens. We have identified hundreds of millions of dollars of cost-driven Adjusted OIBDA opportunities. We anticipate seeing these impacts flow through in 2023 and pick up momentum in 2024. We have begun detailed plans on cost initiatives across the organization and in the businesses where the need is more immediate, like Zulily, we have already begun execution. We improved our inventory position in Q3 with more than a 70% decrease in the numbers of trailers at our fulfillment centers by the end of Q3 compared to the end of Q1. That said, we continue to face capacity constraints at our fulfillment centers and incremental detention and demurrage costs. We expect to realize lower costs in Q4 due to the reduction in trailers. We also anticipate better capacity utilization as we have secured third-party logistics providers to alleviate some of the capacity constraints. We are close to attaining our normal operating goals for order to delivery times in our current fulfillment network. Going into the holiday season, we believe our fulfillment centers are well staffed. Pillar four is focused on optimizing the brand portfolio. In the third quarter, Zulily introduced free shipping and handling for orders of $89 or more. As a result, they saw a stabilization in conversion rates and an increase in average order value. While national brand product was limited for most of Q3, Zulily has since attracted several national brands capitalizing on industry-wide excess inventory, which will be beneficial moving forward. The percentage of Zulily's revenue from national brands increased to 53% in Q3 from 47% in Q3 2021. Looking forward, Zulily is focused on attracting more national brands, improving the customer experience on this site, and efficiently ramping marketing through more diversified channels. Cornerstone Brands sustained revenue growth with record Q3 revenue at each of its home brands, Frontgate, Ballard Designs, and Grandin Road. These gains were partially offset by softness at Garnet Hill and apparel. Cornerstone opened its West Palm Beach design center in late September. Pillar five is focused on building high-growth businesses anchored in our strength. We were pleased that the average number of monthly active users of our streaming service, QVC+ and HSN+, increased more than 40% in Q3 compared with Q2. We continue to expand our distribution. Our streaming apps are now included on Samsung Smart TVs and on Cox's Contour platform. In addition, HSN has now joined QVC on YouTube TV. We look forward to reporting more progress under Soumya's leadership. As we look to the fourth quarter, QVC will be a presenting partner of this year's Christmas Spectacular starring the Radio City Rockettes, which will open November eighteenth at Radio City Music Hall. QVC will have terrific exposure to the approximately 1 million people who attend the Christmas Spectacular, as well as the millions of Rockettes fans worldwide on social media. The Rockettes will perform and appear live from Radio City during QVC's annual live shopping nonstop holiday party this weekend, November fifth and sixth. QVC.com will feature a curated collection of products selected by the Rockettes through the holiday season. Over this same weekend, we'll host our nonstop party, which is a continuation of 2021's 49-hour event success. It will feature dozens of celebrities, fashion designers, hosts, customer favorite brands, and special popping guests. Content will be broadcast and streamed live across all QVC channels on virtually every platform and device, including QVC, QVC2, our website, mobile app, and social pages, and QVC+ and HSN+ streaming services. Shoppers will find amazing holiday deals and early Black Friday sales prices on a curated assortment of gift ideas. In summary, we are in the early stages of Project Athens. We now have a dedicated transformation office as well as key new executive leadership talent. In the near term, we do anticipate increased promotions due to elevated inventory throughout retail. This is industry-wide and will impact us as well. We also recognize that consumer sentiment is lower than last year, primarily driven by macroeconomic challenges. That said, we are intensely focused on the execution of Project Athens and reiterate our 2023/2024 outlook we unveiled in June, with stable revenue and double-digit CAGRs for OIBDA and free cash flow. We are motivated and confident in our ability to deliver on Project Athens. We look forward to reporting progress in future calls and seeing you at Liberty's Investor Day on November seventeenth. I am pleased to welcome Jim Hathaway, our interim CFO, on our call today. He will provide more details for each of our four business units momentarily. Before I turn it to Jim, I wanna thank Jeff Davis for his service as our CFO for the past four years. When Jeff left, we named Jim Hathaway interim CFO. Jim joined us in May 2021 to lead finance for QxH and is intimately familiar with our unique business. Prior to Qurate, Jim spent more than 20 years with PepsiCo Frito-Lay in various financial leadership roles of increasing responsibility. Most recently, he led financial planning and analysis for Frito-Lay North America, a division of PepsiCo. Now, I'll turn the call to Jim to discuss the details of each business unit. Thank you, David, and good morning, everyone. Unless otherwise noted, my comments compare financial performance for the three months ended September 30, 2022 to the same period in 2021. Starting with QxH. Revenue declined 8%, primarily on lower unit volume. E-commerce revenue declined 8% in line with the overall revenue performance. Recall that in Q3 of 2021, we experienced inbound freight delays that impacted our ability to secure product on time last year. In addition, we saw an increase in advanced orders in Q3 of 2021 that shipped in Q4 of last year. This benefited Q3 of 2022 revenue, and this dynamic is expected to reverse in Q4 of this year. We, like the broader retail industry, are facing excess inventory. We made and are making conscious efforts to reduce our inventory through promotions and clearance actions. As David mentioned, we got started on this earlier than others in retail by necessity due to the Rocky Mount tragedy, which has had a longer-lasting impact on our profit margins, but is leading to improvement in our inventory balances year-over-year. This promotional activity was mostly in the home category in areas such as seasonal decor, storage and organization, cookware, kitchen electronics, home office and gaming, but also in fashion, such as loungewear. Home revenue declined 9%, which was an improvement from the first half of the year. In Q3, we experienced lower demand, primarily for seasonal, cleaning, heating, air purification, bed and bath and garden, partially offset by gains in food. Apparel declined 2% against 8% growth in Q3 of 2021, which demonstrates solid two-year performance. Weakness this quarter was primarily in contemporary apparel. Beauty declined 10%, primarily due to weaknesses in bath and body and prestige skincare. Accessories declined 10%, primarily due to lower demand for handbags and luggage, intimates and casual and athletic footwear. Electronics revenue declined 11%, which was an improvement from our over 25% declines in Q1 and Q2. The Q3 softness was primarily in computers and home office. Adjusted OIBDA experienced meaningful pressure, declining 56% with adjusted OIBDA margin decreasing 930 basis points. Looking at the main components of the margin compression. Gross margin declined 530 basis points, primarily reflecting unfavorable fulfillment expenses, product margins, and obsolescence expenses. Fulfillment expenses reflect capacity and operational inefficiencies that resulted in detention and demurrage costs, higher freight rates, fuel and wages, largely due to inflation, higher rents at fulfillment centers and from the sale-leaseback and sales to leverage. These headwinds were primarily offset by savings from decommissioning our Lancaster, Pennsylvania and Roanoke, Virginia, fulfillment centers last year. Product margins decreased primarily due to our inventory reduction actions, especially at HSN, as well as lower shipping and handling revenue. We also lapped the price increases we started in Q3 of 2021. We did not repeat these increases in Q3 of 2022 due to the macro environment. These pressures were partially offset by favorable returns and a mix shift into apparel. Inventory obsolescence increased primarily due to higher current year reserve provisions. We reduced QxH inventory 5% year-over-year, which was an improvement from the increase in Q2, reflecting rigorous efforts on inventory management and more disciplined buying behavior. Operating expenses were unfavorable 110 basis points, primarily due to commissions and customer service. Commissions were primarily due to expanded over-the-air distribution on ION, TEGNA, Scripps and Nexstar. Increased customer service expenses reflected sales-to-leverage and increased wage rates. SG&A was unfavorable approximately 290 basis points. Fixed cost pressure was primarily due to sales-to-leverage and investments in video commerce ventures and IT, higher wages, and corporate rent post the sale-leaseback. Marketing reflects investments to expand our commerce platforms, cost inflation, and lower efficiency of marketing spend. Bad debt pressure reflects increased current year provisions, though bad debt as a percent of net revenue was less than 1% in Q3. Moving on to QVC International. My comments will focus on constant currency results. Revenue declined 5%, primarily on lower unit volume and reduced shipping and handling revenue. Our largest European business, Germany and the UK, declined in the low double digits and, as David mentioned, experienced a cautious consumer sentiment from historic inflation, particularly for energy, the ongoing war in Ukraine, and the interruption of program in the UK following the death of the Queen. QVC Japan was less impacted by these factors, however, and grew mid single digits. E-commerce revenue decreased 5% in line with overall revenue. QVC International experienced declines in home, beauty, and accessories, which were partially offset by modest gains in apparel and jewelry. Adjusted OIBDA decreased 35% and adjusted OIBDA margin declined 530 basis points. The primary factors of the margin compression were lower gross margin and higher fixed costs. Gross margin declined 100 basis points driven by the following factors. Product margins declined, reflecting lower initial margin due to inventory reduction actions and lower shipping and handling revenue due to reduced unit volume. Inventory obsolescence costs reflected increased reserves for specific slow-moving inventory that is expected to be liquidated in Q4. Fulfillment costs reflect sales to leverage and higher labor costs caused by increased minimum labor rates and COVID-related staffing challenges, as well as higher freight rates in European markets. SG&A was favorable primarily due to higher fixed costs and marketing expenses. Fixed costs rose due to higher wages and benefits as well as software and IT project costs. Marketing expenses included investment to support our growing Japan business. The US dollar strengthened significantly against the yen, euro, and the pound. These currency changes mostly impact the translation of our international markets into US dollars. They have limited impact on our direct purchases of costs and goods. Our two largest markets are Japan and Germany. Japan has limited US dollar direct purchases, and Germany negotiates its direct purchases in euros. Our UK operations purchase only about one-third of its direct goods in US dollars. Moving on to Cornerstone. Revenue grew 8% with record performance at each of its home brands, Frontgate, Ballard Designs, and Grandin Road, driven by demand for bath, case goods, home furniture, and Halloween products. These gains were partially offset by reduced demand for apparel at Garnet Hill. E-commerce revenue increased 10%, and penetration rose 150 basis points. Adjusted OIBDA decreased 58%, primarily due to higher inbound transportation costs, detention and demurrage fees for storage and handling, and higher marketing costs, which were partially offset by initial margin gains. Looking at Zulily, revenue declined 39%, primarily due to lower unit volume reflecting limited availability of national branded product in the quarter and marketing inefficiencies due to cost inflation. This caused Zulily to reduce marketing spend, affecting its customer acquisition and retention. Adjusted OIBDA at Zulily declined 47%, primarily due to the deleverage of fixed costs, which were partially offset by favorable marketing expense, fulfillment, and product margins. Now I'll discuss two technical areas from Q3. First, due to challenging economic conditions, weakened business performance, the decline in our stock price, and a significant increase in discount rates used, we accelerated our annual impairment assessment. As a result, we have taken a non-cash impairment charges of $2.7 billion at QxH and $366 million at Zulily. These charges are related to the respective business' goodwill and the trade names of HSN and Zulily and are included in operating income but excluded from Adjusted OIBDA. Second, you will see in the 10-Q filing later today that we identified a material weakness in our internal controls over financial reporting. The identified weaknesses specifically relates to change management and user access processes around information technology controls at Zulily. It also affects QxH because one of the affected systems is used by QxH. The control deficiencies did not result in any identified misstatement. We have developed a remediation plan that is expected to bring this matter to closure in the near term. Let's turn to the balance sheet and cash flow. Total capital expenditures were $171 million for the nine months ended September 30, 2022, and we spent $36 million on renewal of our TV distribution contracts. Our total free cash flow for the nine months ended September 30, 2022, was a use of $105 million versus a source of cash of $218 million last year. The year-over-year decline was primarily attributable to lower cash from operations driven by operating results in unfavorable working capital. Despite the year-over-year favorability in inventory outflows, working capital headwinds were more timing driven, with increased uses of cash from payables this year related to inventory purchased in 2021, some of which remained in transit due to supply chain inefficiencies. Working capital was also impacted by increased taxes paid this year related to liability management at the end of 2021. These headwinds were partially offset by lower payments for TV distribution rights and insurance proceeds related to fixed assets. Our free cash flow includes insurance proceeds received year to date, given the inventory loss and impact to our results related to the Rocky Mount fire. On a last twelve months basis, our free cash flow was positive $288 million. Included in our free cash flow in the first nine months of 2022 was $280 million in insurance recoveries related to the Rocky Mount fire, $184 million of which is recognized in cash flows from investing and the remainder in operating cash flows. As we communicated on the last call in July, we completed five additional sale-leaseback property transactions, and we received approximately $443 million in cash proceeds. We recorded a $277 million gain on the sale of these assets in Q3, which was included in operating income and excluded from adjusted OIBDA. Proceeds from the sale were used to pay down our revolving credit facility. The tax liabilities for these sites will be largely payable before year-end 2022. For these transactions, we entered long-term lease arrangements for the properties at attractive rates with annual rent payments of $47 million that will impact QxH adjusted OIBDA. In early 2022, we agreed to terms for the sale and leaseback of our UK and Germany fulfillment centers. We expect these transactions to close early in the first quarter of 2023. We anticipate receiving gross consideration of approximately GBP 68 million for our UK fulfillment center and EUR 97 million for the German facility and expect to use proceeds to reduce debt. Looking at our debt profile, on September 30, we had $545 million drawn on the QVC revolver with $2.7 billion of available capacity. Our leverage ratio, as defined by the QVC revolving credit facility, was 2x. We have ample cushion relative to the 4-4.5x maximum net leverage covenant threshold in our credit facility. This net leverage covenant includes the Adjusted OIBDA of QVC, Cornerstone, and Zulily. Thank you again for your interest. With that, I'll turn the call over to Greg. Thank you. David and the entire Q management team are obviously very focused on stabilizing the businesses here. There is a weak macro environment and a highly promotional environment among retailers, and that intensity is clearly impacting Q as well as the broader retail market. We do also acknowledge many areas where we need to improve the operating performance at several of the businesses. Importantly, we did make progress on inventory reductions in the third quarter and are on track for longer inventory reduction actions. These should lead to working capital improvements and improved free cash flow. David has attracted a top-quality team to support his plans, including the actions under the pillars. Liberty and the Q teams are very focused on driving balance sheet improvements that we made in Q3 and forward. We did pay down the revolver with proceeds from the sale-leaseback that was completed in July. As you heard, we have a European series of sale-leaseback transactions that are signed and will provide additional capital. The estimated gross proceeds of approximately $170 million on current exchange rates. We expect to close that early in the first quarter of 2023 and again intend to use those proceeds to further reduce debt. We do look forward to seeing you at our annual Investor Day on Thursday, November 17, as David mentioned. Please visit the IR calendar on our website for registration details. We will be hosting our annual Q&A session. If you'd like to submit questions in advance, you can email them to investor@libertymedia.com. With that operator, we'd like to open up for questions. Thank you. We will now conduct a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in a question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that's star one at this time. One moment while we poll for our first question. Our first question comes from Oliver Wintermantel with Evercore. Please proceed. Yeah, good morning. I had a question regarding working capital. How should we think about that in the fourth quarter, you know, the very important holiday quarter? You said that, you know, inventory should get better, so it should be a net positive from that. But maybe you could give us a little bit more details how you think about working capital into the fourth quarter. Great. Thank you for that question. If, as I look to Q3, what we discussed was the exchange between better usage of inventory and a reduction in our inventory levels and higher payables. I don't wanna give guidance on Q4, but if you look at the last two years, we've had an exchange from a turning down our inventory levels disproportionately and the payables should catch up, as we discussed. What other question? On page eight in your presentation, you know, where it shows customer count, it looks like, you know, existing, new, and reactivated customers are now below pre-pandemic levels. I just wanted to see, you know, in the short term, how do you plan to stabilize the customer bleed here? Thank you. Yeah. This is David. Thank you for the question. We did see customer count declines. I think there are a number of drivers. I'll click through them relatively quickly and then talk a little bit about what we're seeing and what we're doing. I think part of it is a need for better merchandise. Obviously, we've not had access, right time, right product, right value, right host in quite the way we would if we were operating in a normal environment and that has particular impact on our business model. And I would say there are some categories like beauty that have been especially impacted by the fire at Rocky Mount. I would also say I think we've been particularly weak in attracting new customers over the last few quarters. Some of that's because it really centers around our ability to attract new customers, really centers around consumer electronics and home products, which were all difficult coming out of the pandemic. Finally, I would just point out if you look at our customer count by cohort, we did see a very large crop of low quality customers that we attracted during the pandemic, which are still working their way out of our numbers. In terms of what we're doing to address it, really the first action I talked about in my comments, which was shortening the TSV availability. It goes back to the execution of our core business model. We know that when we execute on our today's special and today's special value, it increases the attraction of new customers and the stickiness of our best customers. For reference, as a result of some of these actions that we've taken, we did see improvements in the rate of decline. For our TS and TSVs for the quarter, we were down low teens% compared to high teens% and low twenties% in the first half. We are starting to see that perform better, and I think that will flatter our customer count as we continue to improve there. We are also bringing guests back in studios. During the pandemic, we went to remote guests and we've gotten consistent feedback that that's made our presentation less interesting. We think that's going to help. On the merchandise side, we've talked about some of the talent we brought in on the merchandise side. We also had a global vendor summit here at our headquarters where we brought in all of our top vendors and talked to them about what we needed to do to get to more innovation and different types of refresh cycles across our assortment. We think we're on the path to getting new, more exciting assortments to bring to customers. Again, I would point to some early signs. The rate of our total customer count decline did moderate in Q3. It was down 11%. In the first half of this year it was down 20%, or down 17% in Q1 and 16% in Q2. We do see that we're making progress in stemming that decline. I would also say that the rate of new customer count decline moderated in Q3 as well. We were down mid-teens in Q3 compared with 30% declines in each of the first two quarters. It's a work in progress. We recognize that we have to have a healthy customer file to get back to a growing business. We've been moving against it decisively, and we're encouraged by some of the early signs of moderation we've seen in declining customer count and hopefully moving towards a position where we can start to grow that count again. Thank you very much and good luck. Thank you. Our next question comes from Jason Haas with Bank of America. Please proceed. Hey, good morning, and thanks for taking my questions. I had a couple I wanted to ask on Zulily and then Cornerstone. On Zulily, I thought that we maybe would've seen better stabilization and results, just given we had talked about on the last earnings call. I think it was mentioned as well about the better buying environment out there. I'm curious if you are seeing better inventory availability and, if not now, when would you expect that to you know we should see some benefit from that in top line stabilization? Yeah. On Zulily, it's a great question. We are definitely seeing much better inventory availability. We have signed on 200 new brands of various types, including 15-20 national brands. Those will be launching in November and December. Those 15-20 tier one national brands are all brands that we haven't had over the last 18 months. We're seeing a type of availability we haven't seen in some time and we think this will increase site conversion. We also think it will help to stabilize revenue. It's taken a bit of time for us to get these on the site and start promoting them, to your question, Jason. There's just a lag cycle. The brands have to realize that they need Zulily as an excess inventory outlet. We have to negotiate timing. We have to establish and set up to get the inventory shipped, and then we have to run the promotion on the site. It's a three- or four-month cycle, and so we'll just start to see the difference this month and next month in the level of availability of the brands on site. The other thing I would just point out, which is it's not only about getting the tier one brands, it's also about the level and depth of the assortment that we have available to us, which we've also seen expanding very substantially. Last thing I'll point out is the leadership at Zulily has been there about eight months now, and I think as you go through the holiday season, you'll see a number of changes, including the new shipping offer, including a real diversifying away from Facebook into other marketing channels. We've already seen pretty strong improvements in the unit economics of the business. I would agree with you. It hasn't, the numbers haven't come through quite as quickly, I think, as we would all have hoped, but I think we're in a good position now. You had a question, I think, also about Cornerstone. Thanks. Yeah, on Cornerstone, I'm curious for the overall business. You called out a lot of macro and external headwinds, and I'm curious why those weren't. It doesn't seem like they were much of a factor for Cornerstone. The revenue growth has been really strong. Looks like the gross margin was a bit, a little bit weaker. I think you called out some freight charges there. Just curious, why haven't those macro challenges affected Cornerstone as much as the rest of the business? Yeah, it's a great question. I'd point to a few things. I think first, essentially all Cornerstone product is proprietary or private label. It, because of that, is insulated a bit from some of the discounting pressure and the other things that are going on in retail. That's first. Second, I think a direct marketing skill set, catalogs, paper, customer by customer, category by category is even more valuable in the current environment. I actually think there's some benefit to being catalog-focused when you're seeing the type of inflation that we've seen in some of the digital marketing environments. What I think used to look like a weakness now looks like a bit of a strength. I'd also say we've seen continued increases in investment around home, both indoor and outdoor. I think there was some sense that might moderate coming out of the pandemic. But what we've seen is people shifting their wallet more consistently to doing things to upgrade their home, whether that's grills outside or patios outside. We've seen a much longer leg to outdoor furniture than we've thought or than we've seen in prior years. We're also continuing to see really strong dynamic for people to continue to upgrade their home. A lot of those trends look stickier than I think the common wisdom had baked in. All of those things make us think that this revenue growth profile of Cornerstone continues to look strong going into next year. Of course, next year, we've talked about, we're gonna continue opening at a deliberate pace stores for the Cornerstone brands, especially Ballard Designs. The stores have continued to perform extremely well, continued to grow and continued to have good profitability. We think continuing to open stores at under-penetrated areas should be even an additional positive for the Cornerstone story. That's right. That all makes sense. Thank you. Our next question comes from William Reuter with Bank of America. Please proceed. Prepared remarks when you discussed timing of shipments and their delay from the third quarter to the fourth quarter of 2021. It seemed like you were kind of indicating that the challenge, that the comparisons are gonna become more difficult in the fourth quarter. Some of these trends that we've seen in the third quarter could get even more challenging. Was that the message we were supposed to take away from that? Yeah. We had an exceptional event last year, given everything that was happening in supply chain, where we took a lot of advanced orders that didn't ship. I think it's fair that they in the compare help a little bit in Q3, hurt a little bit in Q4 just because of when that revenue is recognized. We don't recognize it until it's shipped. That's there in the numbers. It's not a massive swing in the numbers, but we just wanted to highlight that it was an impact. I would say we saw improvements in levels of decline in moderation coming into this quarter. I talked about some of the underlying drivers of that, and I think we're gonna continue to hit the execution on those. We anticipate continuing to be able to make progress. That's helpful. It sounds like you are pleased with the progress you've made on clearance of inventory. It seems like the fourth quarter is gonna still have a pretty substantial amount of this. Do you expect you'll be largely done by the end of the fourth quarter, or should these efforts continue on into the first or second quarter of next year? Yeah, it'll depend a little bit on how the fourth quarter performs, of course. We feel very good, though, about the position we're gonna be in coming through the fourth quarter. It's possible that there could be some hangover as we go into Q1, but we feel pretty good. As we look out across the universe, if you look at NPD data, some other industry data, it suggests the market's up about 20% in excess inventory across retail. We're down about 5%, so we're going into this a lot more clean than the overall retail environment, and we think we'll continue to improve on that number as we go through the fourth quarter. There may be some hangover going into Q1, but we think we'll largely be through getting clean on inventory and getting to a level we're more happy with as we go into Q1. Okay. Just lastly for me, you're clearly making a lot of efforts to accelerate your streaming business. Do you have a sense for what percentage of your sales are coming from streaming at this point? I know it may be difficult, but maybe you have some sense for where that is and where you think it maybe will go over the next year. Yeah. We haven't broken that out up until now. We're looking at how to give you some additional visibility into how to think about our streaming and content. I would say it's not a primary driver today, but it has been growing very quickly. It's material, but I wouldn't say it's a primary driver of results yet. What we've seen in terms of customers is a streaming customer we think is as valuable or potentially more valuable than a linear TV customer. We've been happy as we've gotten to know the customers, even as we've grown the service. But eventually, medium to long term, I think as people continue to move from linear to streaming, it will be an increasingly big and important part of our portfolio. I think in the U.S., streaming reach overall, in the broader market has already surpassed linear TV reach. I think we passed that threshold this year, and I think there'll be a lag for us. Over time, I would imagine that we will replicate some of those same dynamics. It's definitely an emphasis. Great. I'll pass it on. Thank you. Our next question comes from Carla Casella with JP Morgan. Please proceed. Hi. Thanks for taking the question. I'm wondering, did you buy back any of the senior exchangeable debentures in the quarter? I noticed that the balance came down a little bit, and I'm not sure if that's just the carrying value or if you purchased some. Ben. Hey, Carla, it's Ben Oren. We did purchase some. We actually purchased 41 million current or adjusted principal amount and 45 million debentures for a cash cost of $24 million. Okay, great. The sale-leasebacks, the two additional ones in Europe. Beyond this, what are your remaining kind of material owned properties? We do have several additional material properties. I think the interest in doing additional sale-leasebacks will be opportunistic and dependent on market conditions, but we'll continue to look at opportunities across the portfolio. Okay, great. Looking at the customer count, I know you got this question before, but so at QVC, you know, it's down 16% year-over-year, 13% from pre-pandemic, and 6% since the first quarter. When do you expect to see potential stabilization in that customer count, or are you seeing any green shoots yet? Yeah. Appreciate the question. Say a couple of things. The first is, we sort of look at customers broken out within the business by new, occasional, returning, and our best customers. I would say our best customers have held up better than our total customer file. We're pleased with that. Certainly the spending behavior of our best customers have been extremely strong, growing in the quarter. Our new customers have been a potential source of weakness, often being down in the first half in the 30% range, and that's been a real drag. Now, new customers in our mind are not nearly as valuable as best customers, so they count for less. For the long time health of the customer file, they're very important. We've cut that rate of decline for new customers by more than half already. We're gonna continue to hammer away at making our price value proposition much more attractive for new customers. On the overall customer file, like I pointed out before, we have seen a moderation of the rate of decline. We think we know why we're driving that moderation, and we think we know the tools we have at our disposal to continue working on getting back to a stabilized growing customer file. Okay, great. Just one on the business interruption. You mentioned that you filed or submitted your claim. Just trying to understand, could the magnitude of that claim be greater or is it less than the damage insurance claim proceeds that you already received? David, do you want me to take that? Sure. Yeah. I would say we filed the claim. There's some negotiations going on. I don't know that we're ready to comment at this point, whether it's gonna be bigger or smaller than the property amounts that we've gotten back. It is material like those property amounts have been. I just don't know that business well. Yeah, we expect it to be material. Okay. Just a clarification. You've got plenty of revolver capacity now. You've got some near-term maturities still. Would you use your revolver or can you use it to take out near-term debt? We can use the revolver to take out near-term debt. I think we're being prudent with respect to interest expense, you know, current interest rates and relative to our really low coupons on some of the nearer term maturities. More likely if we were to use the revolver, for example, for the March 2023 maturity, we would just do it just prior to maturity as opposed to a proactive repurchase. Okay, great. Understood. Thank you. Our next question comes from Hale Holden with Barclays. Please proceed. Good morning. Thanks for all the detail this morning. I just had a quick question on the TSV and TS statistics that you gave in the script. You know, I'm surprised that you're still shifting a lot of them, I guess, given what looks like a you know, better inventory flow through than what you had last year. Any color there would help. Yeah. We have seen some moderation in that. I would say the supply chain is better than it was last year for sure. The supply chain is not fully healed yet. There still is bumpiness and arrivals and availability. We're still, some of our vendors are in better positions than others in terms of their catch up with their own supply chain. The other piece of it, of course, is as we've gotten through the inventory at Rocky Mount, there's some lumps in that inventory, and there's also some changes. What we need to do is we discover what's sellable and what's not in the promotional calendar. All of those things I think have continued to make the calendar a little more unstable than we'd like. It was a lot better in the third quarter than it was in the first half, and I think we feel pretty good about being able to operate much more in line with our normal promotional calendar in Q4. Then sort of a follow-up on that. In the EBITDA bridge or margin bridge that you guys provided, you know, I saw the sort of margin decline for merchandise margins, but I would think on a go-forward basis that there could be a meaningful benefit to shipping costs just given what we're seeing on ocean freight. Any color you could tell us on what that could look like next year would be helpful. Thank you for that question. We spend a lot of time reviewing the shipping rates, and what I would offer up is that we do start to see declines in shipping rates in the marketplace. We have seen stabilization broadly similar to the broader market in our supply chains from ocean-going freight, which is a large portion of our business. I would just point out there are some substantial lags for two reasons. First, it just takes those lower rates time to show up on the P&L from the time that you contract it before it gets on the water, before it gets here, and before it flows through the numbers. Second, some of the shipping rates are at spot prices, but a lot of it is also on contract. In some of those areas, you have to roll off of the contracted rates before you can take advantage of the lower spot and market rates that are in the market. It does look like it'll be a good guide going forward, but it'll come into the P&L and give us relief over time. Thank you. I look forward to checking out the sale this weekend. Our last question comes. Thank you. you. Bye. Our last question comes from Steve Litt with 4010 Capital. Please proceed. Yes. Hi. Thanks. Just a two-part question. I was a little surprised, given all the initiatives you've announced and the sales decline, that the costs were up so much. I imagine there's some temporary costs in there. Can you highlight, I guess, how much was temporary? Then kind of related to that is just you've given EBITDA guidance, which on the surface sounds good as up double digit, but the base seems to keep going down. Can you be more explicit on what double digit means and what the base may be so that we have an understanding of what your actual targets may be a few years out? Thanks. Yeah. Great. Let me hit the second part first. I think we tabled it, or we established the base year as 2022 intentionally, given some of the puts and takes getting through this year. We think we'll have a cleaner base and read going into 2023, 2024. That's why we stated it like that. I think we'll be able to give you a little bit more detail as we land 2022 when we're able to talk about what Project Athens looks like going forward. I don't think we're prepared to announce new targets today. In terms of cost pressures, I'll take a little bit of time with this one because I think it's important. I would really bucket the cost pressures in the four buckets and it's important to separate them because what we have to do against them is a little bit different. I would think about fulfillment, other inflationary impacts, our inventory liquidation efforts, and then sales deleverage across the P&L. On fulfillment and supply chain is the largest driver of cost by a lot. This really has two components to it. The first is Rocky Mount. We just had to hire more people because we're more manual. Rocky Mount was one of our largest and most efficient processing facilities. We also have more expensive transportation and routing because we don't have coverage that is good in that part of the country. The other part of Rocky Mount was we now had capacity constraints, so we had to go out and lease more buildings. We also had to leave more inventory in trailers. So all of those were costs that should be coming out of the P&L. I would point out that we've made substantial progress. I talked about the trailers coming into, I think, Q2. We had 1,000 trailers across various yards in the network. We're down at the end of Q3 to 275 trailers. Since the end of Q3, we've gotten that down even further. Things like detention and demurrage, which were penalizing in this quarter over time, should work their way out. In terms of other inflationary impacts, which is sort of the second category, that's where you see marketing costs. The digital marketing environment's been tough, although I would hope that comes down. We've also invested a little bit, although not a material driver, into our streaming business on marketing. On the gross margin line, obviously, we've been moving to get rid of some excess promotions. We started that early. We've made substantial progress. That's had a material impact on margins. We think we'll continue to see that impact through 2022, but we should see that start to moderate in 2023. Then finally on sales deleverage and the P&L, I would just say we were down 9% constant currency. When you're seeing that sort of down, it's just hard to remove SG&A at in period at the same rate of the sales decline. We also, because of the overall consumer environment, unlike last year, weren't able to counteract very much of it by taking price. That's both because of the environment and because we're being more promotional to move inventory. What I would say is we're attacking all of these areas, even if you can't get it in period. We're exiting multiple leases around the world. Zulily has already taken very strong action in terms of right sizing headcount. Across the business, of course, we're also very intentionally managing headcount. If you look at the headcount across the business, despite the increases that we've had to deal with Rocky Mount, overall business headcount is still notably down year-over-year. We've kept a really tight grasp on how costs are flowing through the business. I think as we go in the next year, and as we stand up the transformation office, we only intend to accelerate these sorts of cost efforts. Great. Thank you very much. Operator, I think we are done for the day. To our listening audience, thank you for your interest in Qurate. As we said, we hope to see many of you in a couple of weeks in New York. That's it for this morning. Thank you. This concludes today's teleconference. You may disconnect your lines at this time and thank you for your participation.