Revenue at U.K.-based illustrated book publisher Quarto Group fell 3% in the first half of 2014, falling to $65.6 million. Operating profit dipped to $2.8 million from $3.0 million in the first six months of 2013.

In the U.S., the recently rebranded Quarto Publishing Group USA saw sales fall to $27.0 million from $29.1 million in last year’s first six months, with operating profit down to $2.2 million from $3.6 million.

The major factor in the decline in the U.S. was the closure of the distributor HDA which prevented Quarto from getting its titles into Lowes and the Tractor Supply Company for four months and put a $500,000 dent in earnings. Quarto said that beginning in the spring it started distributing directly to those two chains and that it expects sales there to be more profitable than when they used HDA. Other factors that led to the decline in first quarter sales were “destocking” of backlist titles at some North America retailers and cautious frontlist buying.

Quarto CEO Marcus Leaver acknowledged that the first half of the year was "tough," but said he expects the company to have a strong second half and to hit its profit targets. "I am confident in our product and in our new sales and marketing platforms," Leaver said. He cited a stronger publishing list in the second half of the year, improvement in its Australian/New Zealand display marketing group and a pay off in investments made in 2013 in sales and marketing as reasons why he sees improvement in the second half of 2014. In addition, the company expects to see contributions from its new gift and stationery line and will release its first titles in its children’s book imprint, Walter Foster Jr. "We have a lot going on." Leaver said.