Net earnings rose 28.1% at Educational Development Corp. in the year ended February 28, 2019, over fiscal 2018, while sales increased 6.1%. Profits in the most recent year were $6.7 million, up from $5.2 million in fiscal 2018, and revenue rose to $118.8 million, from $112 million.
Unlike in recent years, EDC’s publishing division drove the revenue gain rather than its direct sales unit, which has had rapid growth for three years. Sales in the publishing unit increased 26.2% in fiscal 2019, to $10.4 million. EDC attributed the gain to higher sales with its largest retail customers due to new in-store promotions that did not occur in the prior fiscal year. Still, publishing accounted for just 8% of the company’s total revenue.
Sales in EDC’s direct sales group were $108.4 million in fiscal 2019, an increase of 4.5% over fiscal 2018. The company said the increase in the division was due to an increase of 3.6% in the number of independent reps selling its titles, which averaged 32,000 in the year, plus “improvements and expansion of our product lines.”
In remarks accompanying the release of its financial results, company chairman and CEO Randal White noted that the growth in the number of its active consultants in the direct sales division “has been challenged over the past few quarters, as have other party-plan companies within the direct selling industry, due to increased competition for recruiting new consultants.” According to White, there is more competition for part time, non-traditional employment within the market due to several new market entrants.
White added that EDC’s ability to grow despite more competition for indie sales reps "shows the strength of our sales force, the value and quality of our product lines and the improved shipment execution of our operations department." He added: "We expect this increased competition to continue and are actively addressing it."