Currency Changes Dent Harlequin Quarter

by Jim Milliot -- Publishers Weekly, 10/31/2007 11:33:00 AM

Total revenue at Harlequin fell 2.7% in the third quarter ended September 30, to C$115.7 million ($122 million), although operating profits increased 12.5%, to C$16.2 million ($17.2 million). Excluding currency fluctuations, revenue was up modestly in the period.

Harlequin’s North American retail group had a slight sales increase in the quarter driven by higher prices on some series lines which offset a decline in units sold. Profits in the group rose due to lower advertising and promotional costs and lower depreciation and amortization. In the direct-to-consumer segment, revenue fell due to declines in Harlequin’s children’s continuity programs, while sales in the adult segment were flat. Despite the sales decline, profits inched up because of lower advertising and promotion costs. Overseas, sales in the Nordic group rose 30%, while sales in the U.K. were flat and fell in Japan.

For the first nine months of the year, revenue was up 1.2%, to C$356.1 million and profits increased 20.6%, to C$47.9 million. Harlequin parent company Torstar said the outlook for the remainder of the year for the publisher is stable with positive trends in North America retail countered by declines in the direct market, mixed results overseas and currency changes.