Simon & Schuster increased sales by $1 million in the second quarter ended June 30, 2018, over the comparable period in 2017, to $207 million, and operating income rose by $2 million to $31 million, parent company CBS reported.
The release of the second quarter results came days after CBS CEO Les Moonves was accused of sexual harassment in a story in The New Yorker. During the conference call with analysts discussing results, Moonves did not address the harassment allegations, citing the advice of counsel.
The second quarter performance at S&S was close to its performance in the first quarter, when earnings rose $1 million while revenue fell slightly. S&S CEO Carolyn Reidy said digital audio again led the revenue gain, with sales in the quarter up 27% over the comparable quarter last year, offsetting soft e-book sales; total digital sales rose 3%.
Sales in the adult group were up, Reidy said, citing such bestsellers as The Outsider by Stephen King, The Restless Wave by John McCain and Mark Salter, Spymaster by Brad Thor, and Fahrenheit 451 by Ray Bradbury. Sales in the children's group were down, something Reidy attributed to shifts in the release schedule. She expects the second half to be stronger, when a new Dork Diaries will hit alongside a new Cassandra Clare title.
CBS attributed the improvement in earnings to lower production costs, plus the revenue gain. Reidy explained that S&S was able to reduce expenses while coping with rising paper and transportation costs in the quarter by finding savings elsewhere, such as in lower royalty write-offs. Reidy said S&S continues to look for ways to control expenses, adding that she is hoping paper and transportation costs will moderate. To accommodate the higher costs, S&S has made selective price increases, Reidy said.
S&S has a strong release schedule in the second half of the year, particularly in nonfiction. The recently announced Bob Woodward book on President Trump, Fear, will be released in September with a big first printing, and Unhinged by Omarosa Manigault Newman will be published August 14, with a first printing that is currently 400,000.
For the first six months of 2018, revenue at S&S was even with the first half of 2017, at $367 million, and operating income was up 6.8%, to $47 million.
Moonves continues to run CBS, while the company board–appointed lawyers from the law firms Covington & Burling and Debevoise & Plimpton continue to investigate the allegations. Moonves said that while he may have acted inappropriately at times, he told The New Yorker that “I have never misused my position to harm or hinder anyone’s career."
A number of CBS women executives threw their support to Moonves, including Reidy, who issued a statement Monday giving Moonves her full support: ”I have directly reported to Leslie Moonves for nearly 12 years, and during all that time I have been heartened and deeply impressed by the way in which women have been promoted and championed under his leadership at CBS, treated as equals and rewarded for their accomplishments and talent. He has always been supportive, straightforward, and helpful to me and Simon & Schuster. While it is not my desire or intent to question the accounts of the women in the New Yorker article, I can without hesitation state that the Leslie Moonves described therein is not recognizable as the man with whom I have been personally and professionally privileged to work."