HarperCollins has had a difficult time replacing the megahits American Sniper and the Divergent series since its current fiscal year started last July. That trend continued into the quarter ended March 31, the third period of HC’s fiscal 2016. According to results released by parent company News Corp, revenue in the quarter fell 11%, to $358 million, from the quarter ended March 31, 2015.
EBITDA (earnings before interest, interest, taxes, depreciation and amortization) had a tougher quarter than revenue, falling 36% from $56 million to $36 million.
News Corp said lower e-book sales and a $6 million negative impact in foreign currency were also factors in the sales decline at HC. Digital sales, which includes both e-books and digital audio, represented 21% of consumer revenue in the quarter. In the third quarter of fiscal 2015, e-book sales alone accounted for 22% of sales.
HC CEO Brian Murray acknowledged some softness in North America in the most recent quarter, but pointed out that results in the period a year ago were exceptionally high.
"We had a solid quarter, but we can't do outstanding every time," he said. New Corp's quarterly filing shows just how big an impact Sniper and Divergent had last year: in the just-concluded quarter sales from those two properties were $29 million less than in the quarter ended March 31, 2015.
Lower Sniper and Divergent sales were also a factor in the drop in e-book revenue. In the quarter, e-book sales fell 23%, compared to a year ago. Murray said both Sniper and Divergent sold significantly in digital last year. But he also said the decline in e-book sales can be traced, in part, to "consumers returning to print."
For the nine month period between July 1 and March 31, print sales at HC were up over the comparable period in fiscal 2015 helped by $40 million in sales of Go Set a Watchman. Murray said the market seems to have come to a good balance between print and digital sales, which he believes is a healthy thing.
The market could use a new big book, Murray said, to drive consumers into stores. Murray has high hopes for Bare Bones, a memoir by the extremely popular country radio talk show host, Bobby Bones. Murray said HC has gone back to press several times for the book ahead of its May 17 pub date.
Comparisons to Sniper and Divergent begin easing in the the current quarter and Murray said he is "pleased with the way the quarter is shaping up," pointing to big bestseller hits with and The Rainbow Comes and Goes and The Nest.
For the first nine months of fiscal 2016, HC revenue was down 5% and EBITDA fell 28%.
NOTE: This story has been updated from its original version to include the comments of HC CEO Brian Murray.