While sale for the entire Lagardere Publishing Group rose in the first quarter of 2015, compared to last year’s first period, revenue at Hachette Book Group USA declined 12.3%, the company reported Tuesday morning.
The revenue decline in the U.S. was due to lower e-book sales plus difficult comparisons to the first quarter of 2014, when HBG had a number of big bestsellers including The Goldfinch, I Am Malala and Grain Brain. Lagardere attributed this quarter's drop in e-book sales, in part, to the fact that the company's results do not yet reflect a return to normal business with Amazon; HBG's dispute over terms began in May 2014, and ended in November.
Because HBG’s new contract with Amazon started this March, Lagardere said there has been “a gradual disappearance of e-book discounts" and that this has "caused a slight loss in volumes at the end of the quarter.” With the slump in e-book sales, the format accounted for 28% of HBG revenue in the most recent quarter, down from 34% last year.
In addition to the strong performances by a few bestsellers last year, HBG CEO Michael Pietsch attributed part of the sales decline to weaker than usual lead hardcover titles. The company has books from a number of its biggest-selling authors planned for the rest of the year, including titles from James Patterson, Nicholas Sparks, David Baldacci, Joel Osteen, Michael Connelly, Sandra Brown, Robert Galbraith, Meredith Wild, and Amy Cuddy.
E-book sales were one of the few soft spots for Lagardere Publishing. Total sales rose 7.1%, to 421 million euros, although the company acknowledged that some of that gain was due to favorable exchange rates and acquisitions. Sales in the U.K. were down due in part to a dip in e-book sales. In the quarter, e-books represented 26% of total U.K. sales, down from 28%. Digital sales accounted for 12.2% of total Lagardere Publishing sales, down from 13.4%.
France was Lagardere’s strongest market with sales up 10.4%, with good performances in general literature and in the paperback segment (major success of the Fifty Shades series after the film's release). Distribution and illustrated books also had a good start to the year, Lagardere said.