Houghton Mifflin Harcourt’s trade division is finding 2017, when sales benefited from strong demand for The Handmaid’s Tale and 1984, a tough act to follow.
In the second quarter ended June 30, sales in the trade group fell 15.0%, to $36.1 million, from last year’s second period. The unit posted a net loss of $3.2 million, compared to a loss of $728,000 in the second quarter of 2017.
HMH attributed the weak financial performance to lower backlist and e-book sales (both of which were driven by The Handmaid’s Tale and 1984), as well as to lower frontlist revenue. In last year’s second quarter, the trade group had solid frontlist sales of Papi, Beren and Luthien, as well as the Whole 30 series. Licensing income was up in the quarter.
For the first six months of 2018, HMH’s trade division sales were down 7.8%, to $72.8 million. It recorded a net loss of $7.5 million, compared to a loss of $4.7 million in the first six months of 2017.
In the second quarter, sales in HMH’s education division fell 3.1%, to $339.5 million.
Total sales for the company were off 4.4% in the second quarter, to $376 million.
For the first half of 2018, total company revenue was $595 million, down from $615 million a year ago. However, the company did cut its net loss to $125 million, from $168 million.
In prepared remarks, HMH CEO Jack Lynch said he was “encouraged by our results for the first half of 2018." Joe Abbott, chief financial officer added: "We remain on track to deliver against the targets we set at the start of the year and have reaffirmed our fiscal year 2018 outlook."