A bad fourth quarter contributed to a decline in sales and earnings at Simon & Schuster in 2019 compared to 2018. In the first earnings report since the merger of CBS and Viacom late last year, which formed ViacomCBS, S&S’s new parent company reported that the publisher’s revenue fell 1%, to $814 million, and that OIBDA (operating income before depreciation and amortization) declined to $143 million, from $153 million in 2018.
Earnings took a particularly steep decline in the fourth quarter, falling 29% compared to the final period of 2018. S&S CEO Carolyn Reidy had been concerned that difficult comparisons to 2018, when Fear by Bob Woodward was a big holiday seller, could be difficult to overcome, and that was the case this year, as no new title took off over the holiday season. The higher tariffs on books manufactured in China played a role in the earnings decline as well, Reidy acknowledged. S&S’s big book adult for holidays was a new edition of The Joy of Cooking, which was printed in China along with a number of children’s books. Reidy said while S&S was able to raise prices on some books, it could not make price hikes across the board, and Reidy added that even where the publisher could raise prices, there wasn’t too much room to increase it.
Bright spots for the year included digital audio, where sales rose 15% over 2018, and e-book sales, which increased for the first time in at least three years, up 1% over 2018, Reidy reported. Overall, digital sales in 2019 increased 7%, but the gain was not enough to offset a drop in print book sales. Sales in the children's group were also up, while adult group revenue fell compared to 2018.
International sales were solid, Reidy said, especially in Canada and Australia, which both had double-digit increases in profits due largely to strong local publishing programs. One of the benefits of being part of the new ViacomCBS is that Viacom has a much stronger presence abroad, and S&S has begun looking for ways it can take advantage of those assets, Reidy said.
The fourth quarter profit decline snapped S&S’s record of posting earnings increases in 19 consecutive quarters, but Reidy said she is confident S&S will bounce back soon. The company’s sales are running high compared to the beginning of 2019, and Reidy said she feels that some “energy” has returned to the market.
Among the books she thinks will do well this quarter are The Room Where it Happened by John Bolton that is still scheduled for a March release even as it goes through a governmental review. Other potential big titles in the first half of the year include Chain of Gold by Cassandra Clare, Countdown 1945 by Chris Wallace, If It Bleeds by Stephen King, Big Summer by Jennifer Weiner, and Near Dark by Brad Thor.