Hear us? For those of you who don't know me, my name is Anton Nicholas. That is not important for this conversation. What is, is that it affords us the opportunity to have relationships and conversations with really interesting people and interesting companies, which that is relevant for this conversation. So, I'm joined by David Rawlinson from Qurate. Yep. Welcome. Thanks. Good to have you guys here this year. For the benefit of the audience, Qurate is a Fortune 500, comprising a collection of retail brands, including video-based shopping networks like QVC, HSN, and Cornerstone Brands. But for the benefit of the audience, can you give a little bit more detail on where Qurate- what Qurate is today? And then we can- Yeah ... talk a little bit how your journey here and things like that. Yeah. So we're a great collection of brands. We mostly play in what we call the video commerce space. So that's selling video over TV. You probably know our brands, QVC, HSN, QVC International. So we play in Japan, the UK, Germany, Italy. And then we also have a series of great what used to be called catalog brands, which are now mostly direct-to-consumer, e-commerce, first brands, Frontgate, Ballard Designs, Garnet Hill, and Grandin Road. You all probably get our catalogs to your house. Hopefully, you buy something when you get them, 'cause they're not cheap to print. So, you know, I notice retail in the name. Can you just give us, again, like a quick... What is the proposition that makes you different from other- Yeah ... traditional retailers? If you tune in to QVC, or if you tune in to HSN, what you will see is a host that is probably very well trusted by our customers. You'll see a unique product, often a product of the day, and you will see the best singular way to sell a product, the best singular way to generate excitement about a product. I think we've become real scientists over time, at how do you figure out what will really make a difference in people's lives, and how do you explain it, to people in a way that they can make sense? We sit really at this intersection of entertainment, we're often on your TV, on your computer, we're in your channel guide, but also retail- Right ... and an awful lot of retail therapy. We tend to be discretionary items. So and we're really the only company that's, that at scale, that sits at the center of retail and entertainment, and we do that with real scale. We have 15 networks. We're in 200 million households around the world. We have 15 million customers around the world. We create, we have over 60 billion minutes of content viewed across all of our platforms. So it's a large-scaled combination of retail and media. Yeah, so it's interesting, right? 'Cause that lends to your background as well. So I wanted to take a step back. You've been with the company for two years now, but take me back to your background and why you were drawn to the opportunity at Qurate. Yeah. One of the things I've had the privilege to do throughout my career is to see real transformations of historic legacy brands, that were figuring out some major transition into the future. I was at Grainger when it was going from the largest MRO catalog house to the largest e-commerce digital, repair business in the world. And then I was at Nielsen, right as it was dealing with both the transition from, media, from mostly seeing, Linear TV to mostly seeing streaming that you had to measure, and then from mostly measuring stores to mostly measuring e-commerce. And so, I've loved seeing legacy great businesses then transform into whatever the future was going to be. And when I was at Nielsen, I was CEO of the consumer part of the business, and so we were helping the largest consumer companies in the world, consumer brands and retailers, figure out the COVID and figuring out the pandemic. So we saw all of these massive shifts happening in consumer behavior. Everybody was rushing to figure that out, and we had the data that was at the center of trying to understand that change in consumer behavior. So after Nielsen, I was looking across companies, and this company was really striking to me 'cause it had a great heritage, really solid customers, unbelievable existing customers. I mean, our existing customer buys 30 times a year, $1,500, 90%+ retention rate- Yeah ... like an unbelievable existing customer. It's amazing. But yet it was still this company that was right at the center of two seismic changes at the same time: the first in retail and the move to digital and e-commerce, and then the second in media and the move to all things streaming. And I just thought it was, I just thought it was a really interesting application of both the things I had done around data and consumer behavior and the things I had seen around transforming businesses once they were in the middle of a technological change. Right. So, couple inflection points. That's one, obviously, for the business, that- Yeah ... it's two years now into, let's call it, your turnaround strategy, maybe a year and a half into it. And you've talked about, I think, contextually, as sort of a three-year journey on that turnaround. Yeah. Based on where you were, what you saw, what have you been able to accomplish in the last year and a half that you think sets you guys up for where you're headed in that future? Yeah. So it's been an interesting year and a half. I bet. I will, I will admit to that. So... and if you've been following the stock or the debt, you've seen some pretty large fluctuations over the course of that year and a half. I would say... Relative to two years ago, where were we two years, and why has the story been somewhat negative? And maybe then I'll try to update it to present time- Right Just to give some context. So two years ago, and then after the fire, say we were in a pretty, a challenging space. So we had had two straight quarters already of declining profit growth, or EBITDA, our version of EBITDA. We'd had two straight quarters of that already, and then we had a fire at our largest distribution center in the United States. We lost a contractor in the fire, largest structural fire in the history of North Carolina. We lost about, we think we lost 1 million customers from not being able to serve them. We lost about $500 million worth of revenue as a direct result of the fire. So we were a business that was already seeing some challenges coming off of a pandemic boom that was then really set on our back, and the fire. So what you saw is, all of a sudden, we're pretty heavily levered, our revenue was dropping double digits. We ended up having 8 straight quarters of profit decline. We were the owners of Zulily, which was a really troubled business and was a real drain on free cash flow and profitability, and we were seeing gross margin contraction. So I think if you update that till today, we've made a lot of progress in the transformation in the last 18 months. Our revenue is now back to being stable, down sort of low single digits. We had the first quarterly profit growth, or EBITDA growth, in 8 quarters, and we were up 54% year-over-year. And so that was a major turnaround. We were growing gross margins across our video commerce businesses. Again, we had that EBITDA growth in every single business. And then on the debt side, we paid down substantial amounts of debt in 2023. We have $1 billion in cash, over $2 billion worth of revolver capacity, so we have plenty of room to cover our 2024 and 2025 maturities. And then I think just as big as that, we did all of that while we would continue to invest in the things that are going to be the future of this business. We continue to invest in streaming, we continue to invest in live streaming, we continue to experiment across the platform, and we also continue to reinvest in our existing customers. And so I feel really good both about the difference we've made. I think the third quarter turn was the inflection point for us. Okay. I think the low point was the first half of 2023. And so I was glad that we made the turn. I like what we're seeing out of our customers. I like what we're seeing about restoring the profitability of the company again. In 2022, we had essentially no operating free cash flow as a business. All of our free cash flow came from essentially special item sales, leasebacks, et cetera. 2023, first nine months, we had $464 million of free cash flow. We think we'll continue that trend in the fourth quarter. So in terms of restoring the profit capacity, restoring the free cash flow growth, stabilizing our customer base, and setting us up for a different type of financial performance, and I think a different type of market share, taking performance in the next couple of years, I think we made a lot of progress. I mean, listen, it's amazing. You should be congratulated. We always talk about how, you know, crises are gonna happen, and you're not judged on the crises themselves, but rather how you respond to them. And it seems like, you know, in the midst of a turnaround, to have this fire occur, which was tragic in its own event, to be able to recover from that and set yourselves up for the future that you're seeing is impressive. So, well done. Appreciate that. When we think about that future, one of the things, recurrent theme that we're seeing these days is the sort of, crossover between entertainment and retail, and I mean, that just plays right into- Yeah ... what you do. Talk, talk about how, you know, that's sort of a part of your world, and also give me a sense of how, you know, Qurate is helping people build brands as well, and, and how they're helping, how you're helping fuel other businesses that way. Yeah. So Qurate has... I mean, we go all the way back. So I think HSN started in 1981, QVC started in 1986, and almost immediately, we were the best place for a celebrity to monetize their celebrity, and we've continued that. And so that both gives our celebrity partners and our brands and retailers that work with us a lot of opportunity. It also brings a lot of excitement and an ability to get to know either our hosts, which are celebrities in their own right, or other celebrities we bring in, and we build brands in really extraordinary ways. IT Cosmetics started up with us, I think, in 2010, with their first SKU, one SKU in 2010. By 2016, they were doing $100 million in revenue. They had 1 million customers, and they sold to L'Oréal for over $1 billion. Wow. Right? That's the type of history of building brands that Qurate has had over time. You take somebody like Kim Gravel, who's been with us for about a decade. Her brand is now, started only with QVC, her brand is now a $225 million brand. She started in apparel and then went to beauty. Later this year, we're gonna be launching her in home decor, and so we just have had this extraordinary track record of building brands. And if anything, I think you're gonna see that accelerate next year. I can't talk about all of it, but Scarlett Johansson is gonna be launching a product tomorrow. Wow. Kim Gravel, I mentioned, is gonna be launching a product, and we're gonna be on site in a lot of celebrities' homes, doing even more, going to where the celebrities are. So we're just continuing to drive excitement, and what that does is continue to drive our ability to move massive product. Beekman, one of our top, skincare brands, did a special over the holidays. We sold 114,000 units in two days. La Prairie, 50,000 units we can do in a day. So, we have the ability to move product at a scale because of this entertainment model that's pretty unique in retail. So you mentioned holiday. I'd be remiss in not, you know, seeing if we could get a little out of you in terms of how holiday treated you guys this year. Yeah, it was great. So, Cyber Monday, Black Friday, pretty strong for us. I think what we saw from the consumer generally was stable, something that looked like Q3. Certainly, the bottom didn't fall out, but we didn't see explosion. We saw really good performance. We thought the consumer was choosy from what we saw, but we did see performance when we hit it right, and we saw some good performance actually at the upper end. So Fire Light is our lab-grown diamond-... we generally sell those diamonds between $1,300-$5,000, so pretty high price point, and 2 carats to 9 carats, and they did very well. Our diamond business was up. We had lots of sell-outs. We actually sold out of the 9-carat diamond tennis bracelets, which people wouldn't normally expect for our model. So real pockets of strength, but I would say overall, the consumer seemed sort of steady state from what it was in Q3. How do you carry that on, and what's your view on where the consumer is for 2024? Yeah, so my guess is, I don't back half, I'm not sure. Our view is first half, it looks pretty stable, barring some sort of external macroeconomic event, and really, that's all we need. So, we had, I talked about the third quarter a little bit. We had a really strong third quarter. We really turned the corner in terms of both OIBDA growth and free cash flow growth. Obviously, we haven't, we don't pre-announce, we don't- Yeah ... give guidance, so we haven't announced the fourth quarter yet. But I think when we're able to talk about the fourth quarter, you'll see a real continuation of that inflection point, that we had in the, in the third quarter. Yeah. And so we are seeing everything we need from the consumer to keep making pretty radical progress on our turnaround into 2024. We announced, when I initially announced the turnaround, our goal was double-digit compound annual growth rates in OIBDA and free cash flow from 2022 to 2024, and we think we're on track to hit that. We think we can do that, given the way the consumer looks in the current environment. Well, and let's stick with the consumer, though. So, you know, obviously, you've been able to stabilize it. What are some of the actions that you're ta- you can't rest on your laurels there, though, right? No. What are some of the actions that you're taking to continue to drive consumer? Yeah, we're doing a lot. So, one, we're just concentrating on our existing customer. Our business is relatively concentrated. So everybody talks about the 80/20 rule, about our best customer is about 18% of our file and about 75%-78% of our sales, so making sure that core customer... And by the way, they buy something like 75 times a year, a spend $5,000-$7,000 a year with us. That's right. It's almost a subscription business, 90% retention rates. Like, these customers are massive super customers. So we have to take care of them, so we're looking at new ways to reward them. We're in contact with them. We're bringing them into the studio, so, you know, they've watched often, you know, thousands of hours of our programming- Yeah ... to come in, meet the host, maybe meet a celebrity, maybe get to see behind the scenes of how we put it all together. So we're really getting connected with them. I've talked about the fact that we're bringing in even more celebrities, more events, more specials, but we're also going back. You know, I talked about before, I'm a data guy. Yeah. We're also getting really deep in the data. Yeah. Like, when do we see a customer at their breaking point? When do we see their purchasing behavior start to lag? When do we see them starting to trade down? How do we get better at giving them an offer that is really dedicated and customized towards them? How do we change the way we're pricing online to make sure we're getting the full lift we deserve? We had, in the third quarter, our average sales price was up 6%. That's both because our merchandise is getting better, and we're pricing smarter. Yeah. And so we're doing a lot that gives us a lot of good momentum going into 2024. The other thing I was really excited about in the third quarter was we had had three years since we grew the number of new customers year-over-year. We grew it in the third quarter. Yeah. and so we got back onto making sure that our value proposition was bringing in new customers and working for new customers. I think a lot of the work we've already done, helped with that, and we're only accelerating that work going forward. But it is a critical component of the story, right? We talk about it being media, we talk about it being entertainment, we talk about it being retail, but in large part, it's also a data company, right? Yeah. You guys are so sharp on the data and how you use that to create that connectivity with your customer. Yeah. You're just gonna continue to use that, is my sense. Yeah, that's right. I mean, with the part of the science of this business, if you were to walk into a QVC studio, and we were to give you a tour, at some point, you would go into what's kind of a control room, and you would see us monitoring what's happening in terms of the response to the programming real time. Like, are we seeing an increase in sales? Are we seeing customers in social media that are talking about the product that's currently on air? I mean, this is a business way before data analytics really hit retail that was on a minute-by-minute basis, monitoring how the brand was interacting with the customer, and so it's one of the most data-rich companies that exist. The other thing that's really special about this, and I'll try not to go too deep in data, but the other thing that's really special about this company is, when I was at Nielsen, we used to talk about the fact that the critical thing that nobody has ever had in advertising is true cause and effect. You see somebody advertise Coca-Cola on a commercial. Did that lead to a specific purchase of Coca-Cola? And you're never quite sure. Yeah. Right? So the founder of Nielsen used to talk about, everybody knows 50% of advertising money is wasted. Nobody will ever figure out which 50% it is, so you've just got to keep spending. We sort of know, right? Because we show you a product, and then you buy that product from us, and so we're one of the few, businesses that has a closed-loop attribution model at its fingertips that's already there within the data. And as we move into things like live streaming and streaming, I think those data assets are only gonna be more powerful. ... All right, so a couple of uncomfortable questions for you. Let's do it. With respect to our audience- Okay. What are some of the misperceptions that are still out there, or what are people not getting? 'Cause it sounds like, you know, you've done the right things, and, and that ship is turning now, and has turned. Yeah. So what's being missed out there? What are people not seeing? Yeah, I'd say a few things. One, I think the stock and the way the debt traded for a while was maybe overly punitive, but I went through some of the negative trajectory that we were on, 2 years ago, 18 months ago. I think they overread those trends. They thought that the trends would continue forever. I think we've now shown that we're on a very different trajectory, and we've substantially changed almost all of those, almost all of those trends. So first, I think they overread the trends. Second, cord-cutting has been at the heart of this story. Everybody says, well, two things: number one, you have an older customer, and number two, they're all, everybody's cutting the cord, and so isn't that the end of your business model? I think that's sort of been the narrative for 10 or 15 years. Yet we're still here, and we're thriving again. I just think the business model has been substantially more robust than anybody could have guessed. Now what we're seeing in streaming suggests that we're gonna be able to refill the funnel. I mean, we're really gonna lean into streaming in 2024. We started that in 2023, but in 2023 we already had 2 billion minutes viewed in streaming. Our streaming minutes viewed was up 8%. Our revenue through streaming was up substantially. It's still small for us, but streaming's gonna work for us. Yeah. So I just think people overread the cord-cutting narrative. And then finally, I think there is this in my mind, inexplicable stigma to our core customer. Our core customer is a woman over 45, probably married on average, probably older kids, maybe kids out of the home. But that woman makes 70% of household purchases. She's in an age bracket demographically that's actually growing in the United States and the Western world, when most other demographics are actually shrinking. So we're actually part of a growth sector when people think of us as part of a shrinking sector. That's just wrong. And she's one of the most loyal customers you can have. Everybody says, "Go after Gen Z, go after millennials." Gen Z and millennials switch brands like I switch socks. Yeah. Our customers stay with our brand over years and are loyal. I mean, our existing customer makes a purchase 30 times a year. Essentially, every time she gets a paycheck, she's making a purchase. So I think there's this stigma around mostly serving older women that I'm partly offended by, but I also think just misses the boat. Okay. Like, our customer is about the best possible customer that you can have in the world of retail. She's still there. She's still with us. We know how to serve her better than anybody else on the planet, and I think if you understand that, you can understand more of our story and where we're headed. With that context, you mentioned the streaming part being a small part of the business. Is that, is that a mix you anticipate changing, or given the customer profile, you think it probably remains the way it is? Yeah, well, linear TV still remains incredibly strong. It's incredibly profitable, and it's incredibly sticky. And so I think linear TV is gonna be with us for a long time. It's a great business to be in. And so what we're making sure we do is two things. The first is, as people move from linear TV to streaming, we wanna be there with them. We have QVC Plus, HSN Plus, our streaming service now, so it's there now. And then we wanna build that out. Eventually, we wanna be the number one place in streaming to shop. We wanna be the place where you can go window shop from your couch, and we're gonna do that not just for QVC and HSN, we're gonna do that across the retail landscape. We're building towards that. We're early. That's gonna take a number of years, but eventually we will be, the strongest place to shop in streaming by a lot, and that, that opportunity is really, is really massive for us. So I think over time you will see that grow. In the near term, Linear TV, because it's such a great business, is gonna continue to be great for us. And then also, we're gonna continue to grow e-commerce. You know, we do $6 billion worth of e-commerce, right? Right. We're one of the largest e-commerce companies, in the United States. Nobody thinks about us like that. Yeah. We still think we have massive opportunities in the e-commerce space that are untapped, and so we're gonna be doing some doubling down there as well. And so you will see the mix. It will be a gradual change- Sure ... but it will be a substantial change. 10 years from now, today, I think we're still largely known as a linear TV cable company. 10 years from now, I think that will be a minority of our business, and we'll be known as the leading video-based, multi-platform retailer and entertainer in the world. We've got time for one more question. So you've done all the right things. You're seeing momentum in the business. What keeps you up at night? What, what gets in the way of the continued success that you're having? Yeah, well, macroeconomic environment's really troubled. Yeah. Right? And it feels like there's risk in the Middle East, there's still risk in Ukraine, there's risk in shipping right now, and so consumer sentiment has been up and down this year, so we'll have to keep a tight eye on consumer sentiment. I think second, when I came in, one of the first things I said was there's a lot of opportunity just in execution, just in raw execution- Yeah ... just in getting back to our core disciplines and doing them better. And so when you're in my seat, just making sure we have the right people who have the right orientation for that execution, is really important. And then we're at this critical moment in a turnaround, right? I think we had a really difficult period. That's really taxing, because you're doing all the right things a year before those things turn up, right? Yeah. You change your merchandising strategy, which means you have to design new products, which means you have to get those products made, which means you have to get them into the warehouse, and then you have to put them on there, on air, and then you sell them, and then you see the difference, but that's 9-12 months. And so there's this period where everything's still going down. You're doing the right things- Right ... but you're not seeing it, and everybody's still asking you when's the turnaround gonna come? So that was a really difficult period. I think in the third quarter we started showing we were turning the corner on that period. And so now I think next year, 2, 3 years, the question's gonna be a question about growth. Can we grow the top line again? Can we grow the number of customers in the customer base again? Can we grow our streaming service? That's where all the pressure's gonna be on the next few years, and we've already started working on those questions, and we think we have really exciting answers, but making sure we fulfill our promise on those answers is probably the thing that keeps me up at night. Awesome. We are out of time. We appreciate you being here. Super interesting. David and the team are here for some breakouts. I encourage all of you to connect with him when you get a chance. This was great. Yeah, let me just say, I mean, I was walking around, it's a really magnificent conference. Well, thank you. It's a really interesting combination of brands. We're all... I was talking to the team, we're gonna try to take in some of the brands. I think y'all do a real service to the industry by putting this on. We're honored to be able to participate, but thank you for doing such a good job on this. Amazing. That's nice of you. We waived your registration fees. Awesome. Thanks, everybody. Thank you. That was fun.