Following a record fiscal 2003 that included a 27% increase in sales, Meredith's book group posted another sales increase in the fiscal year ended June 30, but earnings did not match the prior year. "We were facing aggressive comparisons, but I'm still disappointed we couldn't get profits up," said v-p and general manager Doug Guendel.

The book group was running ahead of fiscal '03 for the first nine months of the year, but heavier-than-expected returns on some television-licensed titles in the fourth quarter brought earnings down for the full year. Guendel said Meredith was hurt by "economies of scale," noting that in fiscal 2003, TheBetter Homes and Gardens New Cook Book and Trading Spaces: Behind the Scenes combined to sell more than 1.6 million copies. Without significant contributions from those two high-margin titles in fiscal 2004, "we had to sell a lot more books to generate more sales," Guendel said.

The next two books in the Trading Spaces series, Make It Yours and Color, netted sales of 400,000 and 388,000, respectively last year. The company also did well with niche cookbooks, such as low-carb cooking, with five titles selling more than 100,000 copies each. Sales in the home-improvement segment were solid, including Meredith's Home Depot line. Meredith published a total of 70 new titles in fiscal 2004, up from 60 in '03.

Guendel said the publisher will again up its title output in fiscal 2005, driven in part by its entrance into the children's book market. The company shipped its Spider-Man 2 tie-ins in June and July, and Strawberry Shortcake and Care Bears titles will be released this fall. Guendel said Meredith has also signed licensing agreements with Marvel to do tie-ins related to the company's next four movies, beginning with The Fantastic Four. The agreement moves Meredith into the coloring and activity formats, and Guendel said the company "will move broader and deeper" into the children's market.

Its adult list will feature two more Trading Spaces titles—though first printings will be lower—as well as new books in its deal with the Home & Garden Television network. A 75th edition of The Better Homes and Gardens Cook Book will be shipped in October and November. Meredith has also signed a four-year extension with the TLC/Discovery networks (producers of Trading Spaces, Chopper and Monster Garage) for a right of first refusal for book projects based on new television programs. "We feel this [agreement] extends our house-and-home franchise," Guendel said.