Reader’s Digest continues to struggle to turnaround its various businesses in the digital age. In the second quarter ended June 30, sales fell 22.5% to $290.5 million and the company had a net loss of $93.9 million, a figure that includes a $113.4 million impairment charge. In addition to the sale of its Every Day with Rachael Ray publication, the sales decline was attributed to lower book sales, declining subscription renewals on certain magazines, the closure of its freshHome title and declining advertising sales in Canada.
Robert E. Guth, RD president and CEO, acknowledged that the second quarter results were disappointing. "In particular, many of our European markets continued to struggle amidst a very difficult macro-economic environment. In addition, within our North America segment, although we continued to make strides in digital and advertising initiatives on a number of our media properties, our results were impacted by larger than expected declines in our Books & Home Entertainment business as well as in our Canada business. However, our Asia Pacific and Latin America businesses performed largely according to our expectations,” Guth said.
Guth said the company continues to sell assets that don’t meet its strategy of focusing on its core units. "Despite the overall results for the quarter, our plans and convictions have not changed. While the transformative process we have undertaken is complex, we believe it is the necessary path to position the company for future growth. We remain steadfast in our commitment to building a more stable, more predictable and more profitable business," Guth said.