The weak American dollar took some of the steam out of Harlequin's results in 2003, although the book publisher was still able to increase operating profits 4.1%, to C$124.1 million ($93 million). Sales in the year fell 5.3%, to C$584.9 million ($439 million), which parent company Torstar said was caused by changes in foreign exchange that resulted in a C$38.1 million decline that offset local currency growth of C$4.9 million.
Unlike many U.S. publishers that finished 2003 on a strong note, Harlequin had a weak fourth quarter, in which sales fell 16%, to C$137 million, and operating profit fell 6%, to C$28.8 million. In addition to declines due to currency changes, a change in Harlequin's publishing schedule resulted in a drop in unit sales in the quarter, which led to declines in dollar sales in both the retail and direct-to-consumer channels in North America.
For the full year, retail unit sales in North America rose 5%. The increase was led by a 23% increase in single-title sales, which offset a modest decline in the series business. Units in the direct business fell 10% for the year, which the company attributed to "competitive pressures from alternate channels" as well as a lack of new mailing lists from which to find new customers. In its international markets, sales gains in Germany, France and Italy countered declines in the U.K. and Japan.
Torstar CEO Robert Prichard said Harlequin's strategy "is very much on course." To help focus Harlequin's efforts on publishing, the company is exiting its craft kids' business, the last vestige of Torstar's failed move into supplementary publishing.