QVC Group (QVCGA) 4th Annual Evercore ISI Consumer and Retail Conference summary

Recent business trends and market environment

• Appliance and home goods sales surged during COVID but have since stabilized or declined, with discretionary purchases slowing due to low existing home sales and high mortgage rates.

• Replacement purchases remain strong, while new home sales are steady but not growing; consumers are conservative, focusing on necessity rather than upgrades.

• Inflation is felt more acutely in non-core categories, and housing starts remain at historically low levels despite population growth.

• Retailers report declining delivered business over several quarters, with hopes for increased activity if mortgage rates fall.

Consumer behavior and pricing dynamics

• Consumers are trading down in some categories, especially for replacement purchases, while discretionary segments have shrunk.

• Promotional activity has increased, bringing prices closer to pre-COVID levels, but has not significantly boosted demand.

• Average ticket sizes in furniture and appliances rose during COVID but have since declined or stabilized; focus remains on higher-value services and custom offerings.

Credit, interest rates, and financing

• High interest rates and low housing turnover are the main constraints on sales, with credit availability less of a concern for most appliance buyers.

• Buy-now-pay-later programs are increasingly popular, with low delinquency rates; some retailers have reduced long-term financing offers due to higher costs.

• Credit approval rates remain strong, and delinquency rates have normalized to pre-pandemic levels.