Harlequin was a bright spot for parent company Torstar Corp. in the first quarter ended March 31, reporting gains in both sales and earnings. Revenue rose 13.5% in the period, to C$124.5 million ($105.9 million at current exchange rates) and operating income jumped 19.1%, to C$20.6 million ($17.5 million). Results benefitted from a weaker Canadian dollar, but even excluding currency translation--which added C$11.5 million to sales and C$1.1 million to earnings--sales and profits were up.

Harlequin reported sales gains in its North American Retail and Overseas segments and a decline in the North American Direct-to-Consumer group. Retail sales were led by a strong release schedule and higher sales in the publisher’s single title book and series lines. Earnings gains were negatively impacted by a write-off associated with the bankruptcy of a distributor and higher promotional costs marking the celebration of Harlequin’s 60th anniversary. Lower sales, due in part to the closure of a book line late last year, dropped earnings in the Direct-to-Home segment where a decline in print sales was partially offset by an increase in digital sales. An increase in digital sales drove gains in the Overseas segment, particularly in Japan where Harlequin’s deal with SoftBank began in last year’s second quarter. The increase in digital sales was somewhat offset by declines in print sales. Sales in the U.K. were soft with declines in both direct-to-consumer sales and retail sales. During the quarter, Harlequin closed a direct-to-consumer warehouse in the U.K., a move that will eliminate 16 positions.

Looking at the rest of 2009, Torstar said it expects Harlequin to have growth for the full year, but not at the rate posted in the first quarter. The publisher has largely avoided any negative impact from the worldwide recession, and results for the year should also gain from a weaker Canadian dollar.