Second quarter sales at Simon & Schuster held even at $189 million in the period ended June 30, 2013, while operating income jumped to $20 million from $7 million in last year’s second quarter. Earnings benefitted from the absence of legal fees incurred last year tied to the Department of Justice e-book investigation as well as higher sales of more profitable digital sales. Parent company CBS said e-book sales rose 39% in the quarter at S&S and accounted for 29% of total revenue compared to 21% in the second quarter of 2012.
S&S's digital sales growth is tracking ahead of industry averages and CEO Carolyn Reidy attritubed the increase to strong sales of frontlist titles where, in some cases (such as The Great Gatsby), about half of units came from digital.E-book sales also continued to pick up in the YA area which Reidy attributed in part to greater adoption among teens of lower-priced digital readers. Sales of digital audio also were strong, helping to lead to a 9% overall increase in sales in the audio segment. Sales in the other major areas--adult, children's,and international--were roughly flat.
Reidy said S&S has seen a healthy spread of sales across all channels, ranging from mass merchandisers to online retailers to bookstores. She said S&S has had "productive" talks with Barnes & Noble about resolving its impasse over terms and is hopeful of reaching a resolution.
Bestselling adult titles in the second quarter included Happy, Happy, Happy by Phil Robertson and Duck Commander Family by Willie Robertson, Storyteller by Jodi Picoult, and the still-strong Proof of Heaven. In children's, City of Bones and Clockwork Princess, both by Cassandra Clare and Dork Diaries 6 led the way.
A title that has been doing well recently is Unbreakable by the late Latino star Jenni Rivera. Reidy said S&S is looking at how the title has performed in Spanish-lanaguage markets to see if the company can learn anything it can use to boost the sales of other Spanish-language titles. She noted that publishers have been trying to crack the Spanish-language market for years and the success of Unbreakable is an encouraging sign.
For the first half of 2013, revenue was down 1.4%, to $360 million, but operating profit doubled to $30 million.