HarperCollins revenue fell 2.1% in the quarter ended March 31, 2020, compared to the same period a year ago, but earnings increased 3.1%, parent company News Corp reported. Sales in the quarter were $412 million, down from $421 million in the third quarter of fiscal 2019, while EBITDA (earnings before interest, taxes, depreciation, and amortization) increased to $55 million, from $53 million. It was the best quarterly performance in HC’s fiscal year, which ends June 30, 2020.
Digital sales rose 3% in the quarter, driven largely by growth in downloadable audiobook sales. E-book sales, however, have experienced a “revival” since retail stores began shutting down in mid-March, News Corp CEO Robert Thomson said in a call with analysts discussing the quarterly results. Online sales have also grown since March, CFO Susan Panuccio said. In the third quarter, digital sales represented 23% of HC’s consumer sales, about $91 million, up from 21% in the third quarter of fiscal 2019.
In a filing with the Securities & Exchange Commission that included information on the impact of Covid-19, News Corp noted: “Sales have been and are expected to continue to be adversely affected by shipping restrictions and delays imposed by online retailers, as well as closures of brick-and-mortar retail stores. However, in recent weeks the company has seen an increase in sales of digital formats of its titles.”
Panuccio said HC’s general books group and children’s division in the U.S. both had a good quarter, while HC UK also did well. For the nine-month period, HC’s EBITDA fell 20% from the comparable period in fiscal 2019, to $167 million, on a 6% drop in revenue, to $1.26 billion.