The easing of lockdowns and strong increases in digital sales led to double-digit sales gains for four trade publishers that reported financial results for the quarter ended September 30 over the same period in 2019.
HarperCollins posted a sales increase of 13.1% in the quarter and was able to translate those gains to a 44.9% jump in EBITDA (earnings before interest, taxes, depreciation, and amortization), which reached $71 million. In answering a question in a conference call discussing the results, Susan Panuccio, CFO of HC parent company News Corp, said the big earnings gain was due to the sales mix rather than cost cutting.
HC had a 20% increase in digital revenue in the quarter, which News CEO Robert Thomson said came in the form of an 18% increase in e-book sales and a 26% increase in sales of downloadable audio. Digital sales represented 23% of HC’s consumer revenue, roughly $100 million, in the quarter. Direct-to-consumer sales rose 38%.
HC’s general books group drove the sales gain, helped by titles such as The Order by Daniel Silva, The Guest List by Lucy Foley, and How to Destroy America in Three Easy Steps by Ben Shapiro. Sales of children’s books were also up, driven by demand for backlist titles, News said.
Despite those backlist gains, Panuccio noted that because of the strong performance of new books, backlist sales represented 61% of revenue in the most recent period, down from 64% a year ago. She also said that as the holiday season begins, HC continues to see higher online sales. Upcoming titles include The Greatest Secret by Rhonda Byrne and Ree Drummond’s Frontier Follies.
The Hachette Book Group was a star performer in parent company Lagardère’s publishing group. While overall sales in the Lagardère group rose 6.3% over last year’s third quarter, revenue increased 19.2% at HBG. The HBG gain was led by bestsellers Midnight Sun by Stephenie Meyer and The Return by Nicholas Sparks. In addition to those bestsellers, HBG had strong sales of several books tied to the Black Lives Matter and social justice movements. Digital sales, Lagardère said, “continue to enjoy bullish growth” in the quarter at HBG.
HBG CEO Michael Pietsch expanded a bit on the publisher’s results. He said the third-quarter gains were due to the reopening of bookstores and strong sales of children’s books, science fiction, general fiction, and audio, “which have helped to offset the impact of the continuing global health crisis on some of our businesses.”
E-book sales had another good quarter across all of Lagardère’s publishing operations and represented 9.9% of total sales in the third quarter of 2020, up from 7.8% in last year’s third quarter. Downloadable audiobook sales also grew and accounted for 3.7% of revenue compared to 2.9% in 2019.
Sales of print books and digital content rose at Simon & Schuster in the most recent period, leading to a revenue increase of 28.6% over the third quarter of last year. Sales were $279 million, up from $217 million, and adjusted operating income before depreciation and amortization was $58 million.
S&S CEO Jonathan Karp said revenue in the third quarter was up across the adult, children’s, and audio divisions in the U.S., and international sales also increased, with Canada having a particularly strong quarter. He cited the strength of the company’s titles as the reason for the across-the-board gains, noting that five nonfiction books had all reached #1 on the New York Times bestseller list: Too Much and Never Enough by Mary Trump, Rage by Bob Woodward, The Room Where It Happened by John Bolton, Live Free or Die by Sean Hannity, and Melania and Me by Stephanie Winston Wolkoff. But he was quick to add that S&S had big titles in adult fiction and children’s as well.
Karp said it is encouraging to see print sales remain strong through the quarter as, once again, mass merchandisers and Amazon were doing well with the format. He is also heartened by what he sees as the marked improvement in the ability of independent bookstores to sell online. “I think it is healthy for the industry,” he added.
Karp believes, now that Election Day is over, that people may get a jump on their holiday shopping, which retailers are promoting as a way to avoid difficulties later due to possible pandemic-induced lockdowns. He said two newly released titles, Group by Christie Tate (a Reese Witherspoon pick) and White Ivy by Susie Yang (a Today show pick), have gotten off to a good start, and he thinks they could be strong sellers for the rest of the year. Another holiday title that he believes will do well is Let Us Dream by Pope Francis, which he said “could be the ultimate holiday inspirational book.”
Third quarter results at Houghton Mifflin Harcourt Books & Media were overshadowed by news that its parent company is putting the trade division up for sale to focus on its educational operations. HMH Books & Media had a 15.8% sales increase in the quarter, though its results were different from those of its three larger competitors. Rather than gains in digital sales, HMH said the biggest sales driver in its quarter was licensing. The biggest chunk of licensing revenue, $4.3 million, came from the Carmen Sandiego series on Netflix. Sales in the adult and young reader’s categories were hurt by the closure of bookstores during the pandemic and the corresponding delays in releases of new frontlist titles, the publisher said.