Evine Live shows some progress but still reports a loss

While its loss widened in the first quarter, Evine Live showed other, promising signs under interim leader Bob Rosenblatt, who acknowledged he is vying to become the permanent CEO.

Sales were up — and more importantly, so were gross margins — as the Eden Prairie-based home shopping network toils away to return the company to profitability. Its stock rose 5 percent Wednesday to close at $1.36.

"While we are celebrating these achievements, it will be premature for us to proclaim victory, but we have made significant progress," Rosenblatt told analysts on a conference call. He took over running the day-to-day operations of the company in February after a management shake-up.

When queried by analysts, Rosenblatt, who is also the company's board chairman, acknowledged that he is a candidate for the CEO job.

"I think it's pretty safe to say that my name is in the hopper for going forward," he said.

Rosenblatt was one of several executives who took control of the struggling company in June 2014 after a proxy fight driven by activist investors. Mark Bozek was initially installed as chief executive, but he stepped down in February after investors had lost confidence in his turnaround efforts. Bozek had been focused on diversifying the company's merchandising mix away from its heavy reliance on jewelry and watches toward lower-margin items such as clothes, kitchen goods and beauty products.

As interim CEO, Rosenblatt has been working to continue broadening the product mix while keeping a closer eye on restoring profitability.

Mark Argento, an analyst with Lake Street Capital Markets, noted that Evine Live's gross margins in the first quarter were the highest they had been in six quarters.

"Interim CEO Bob Rosenblatt has demonstrated that he has quickly refocused the company on basic blocking and tackling with strong" first-quarter results, he wrote in a report. "We believe the company is not sacrificing its longer-term rebuilding strategy for short-term gains as Rosenblatt and Co. appear to have struck a balance. While still early, [the first quarter] leaves us feeling optimistic things are getting back on track."

In the quarter ended April 30, Evine Live's sales rose 5 percent to $167 million, up from $158 million, beating analysts' expectations. But the company's loss widened in the quarter to $4.9 million, or 9 cents a share, compared to a loss of $4.7 million, or 8 cents a share, in the same period a year ago. Evine Live attributed that largely to $3.6 million in severance costs it paid out in the quarter.

In addition to the changes at the top, the company laid off about 45 employees earlier this year.

Kavita Kumar • 612-673-4113