Results Drop Again at Simon & Schuster
by Jim Milliot -- Publishers Weekly, 7/31/2008 7:12:00 AM
Simon & Schuster had expected a difficult time in duplicating the record year it had in 2007 in 2008 and that forecast is proving accurate. Sales for the second quarter ended June 30 fell 7%, to $186 million, and operating income declined 19%, to $14.6 million. For the first half of 2008, profits were down 26%, to $29.2 million, on a 10% drop in sales to $387.6 million. Results in the first half of 2007 were driven by the mega-hit The Secret plus two Stephen King titles and despite bestsellers like The Broken Window and Chasing Harry Winston, the company has been unable to replace the sales and earnings generated by last year’s blockbusters.
According to S&S CEO Carolyn Reidy, sales in the quarter were off in all segments--adult, children’s, audio and international, although Simon & Schuster UK is having a good year. In addition to lower sales, higher freight costs contributed to the lower profits in the second period. Digital sales were a bright spot in the quarter. Sales of e-books exceeded all of 2007’s totals by June and the company expects revenue in the format to double for the full year, and S&S will have 5,000 books available for the Kindle by the end of the year. Sales of downloadable audio were up 34% in the first half.
S&S has what it believes is a strong fall lineup, but it was unclear whether the company can rally to match last year’s figures, with Reidy saying she is confident the it will reach its targets. Among its big books for the remainder of the year are Bob Woodward’s still untitled look at President Bush, Real Life by Dr. Phil McGraw, another You title, You: Being Beautiful, Stephen King’s Just after Sunset and Rick Warren’s The Purpose of Christmas.
