Sales and earnings fell at John Wiley in the second quarter ended October 31, 2016 compared to last year’s second period. Revenue dropped 9%, to $433.4 million, and net income decreased 19%, to $43.6 million.
Among the factors in the decline was “substantially weaker demand for college textbooks and custom education material,” Wiley president and CEO Mark Allin said. Sales in college group fell 10% with print textbooks down 22% and custom material down 25%, offsetting gains in online program anagement (18%) and digital books (12%), Wiley reported. The decline, Wiley said, reflects lower enrollments, increased market penetration by rental, channel inventory consumption, and fewer adoptions.
Other factors in the overall sales decline in the quarter include tough comparisons in journal revenue with last year’s second quarter and the negative impact of currency exchange. With the weak second quarter performance, Wiley said it now expects revenue in fiscal 2016 to be flat with fiscal 2015, down from previous predictions of low single digit gains; earnings per share are still expected to be flat with last year. Both forecasts are based on a constant currency model (which excludes the impact of currency exchange).
As part of its second quarter report, Wiley disclosed that in November, the company reached an agreement to outsource its U.S.-based print textbook fulfillment operations to Cengage Learning, “with the aim of creating a more efficient and variable cost model for print products.” Under the agreement, Wiley said it plans to close its New Jersey distribution center in the spring of 2016.