The combination of its decision to streamline its business combined with softer industry sales resulted in revenue at Quarto Group falling 16% in the first half of 2023, to $52 million, compared to the first six months of 2022. Operating profit fell to $3.1 million, down from $7.2 million in 2022. Last year, Quarto sold its Smart Lab unit to Educational Development Corp. for $500,000 and closed its distribution operation to focus on its core publishing business.

"Following the economic challenges faced towards the end of 2022 and into 2023, this is steady set of results following on from the growth in 2022,” chief executive Alison Goff said in a statement. “Whilst revenue and profits were down year on year, the results achieved are in line with our expectations for the seasonally weaker first half of the year.”

Sales fell 23% in the U.S., to $26.5 million, due in part to the sale of Smart Lab and the closing of Quarto Distribution Services. Excluding those items, sales were down 12%, with trade sales and custom down 7% and 44%, respectively. The drop in custom sales is due to the timing of orders and Quarto said it expects the business to recover during the second half of 2023. On the trade side, Quarto said its adult imprints, especially Motorbooks, Rockport, and Walter Foster, continue to perform well, led by Nascar 75 Years and Kawaii Tarot Coloring Book.

Sales at Quarto UK, which includes all results outside of the U.S,. had a 6% sales decline in the first half of the year, to $25.5 million.

Even with the drop in sales, Quarto, always conscious about debt, had $9.1 million in net cash on hand in June compared to debt of $5.6 million a year ago. The company attributed the improvement to strong sales in 2022, better inventory management, tight cost controls, and reduced finance costs.

Goff was circumspect about prospects for the second half of the year, which she believes will continue to be challenging. She added, however: "I am confident with inflation past its recent peak and supply chain issues now easing, we have the right plans in place to capture all potential opportunities. We are confident that these plans will enable us to navigate through these uncertain times.”