The four publicly held trade publishers got off to a good start in 2019, with each reporting a sales increase in the quarter ended March 31 over the first quarter of 2018. In addition, profits rose at the three companies that reported earnings.
HarperCollins had the best quarter of the four. Its EBITDA (earnings before interest, taxes, depreciation, and amortization) jumped 29.3% over the same period a year ago. Revenue in the period increased 5.8%, to $421 million. The revenue growth was primarily due to higher sales in Christian publishing, said parent company News Corp, driven by the success of such new titles as Girl, Stop Apologizing by Rachel Hollis and We Are the Gardeners by Joanna Gaines, as well as the continued success of backlist titles, including Girl, Wash Your Face, also by Hollis. Overall, backlist accounted for 63% of revenue in the quarter. Digital sales rose 5% worldwide, driven by a 32% gain in downloadable audio that offset softness in e-book sales. Digital sales represented 21% of consumer revenue in the quarter, down from 22% in the same period last year.
HMH Books & Media had the biggest revenue gain in the quarter, with sales up over 11%. The increase, however, was largely attributed to higher licensing income derived from the second season of the Carmen Sandiego series now available on Netflix. The licensing income offset a decline in sales of print books, which HMH said was due to unfavorable comparisons to last year’s first quarter, when the Instant Pot and Whole30 series posted strong sales. Despite the drop in book sales, an HMH spokesperson said that the company was seeing strong sales for a number of titles, including Maybe You Should Talk to Someone by Lori Gottlieb and Sprawlball by Kirk Goldsberry.
Revenue at Hachette Book Group rose 3.3% in the first quarter over the comparable period in 2018, reported parent company Lagardère. The increase reflected a little more than $2 million from Worthy, which HBG bought last fall. HBG CEO Michael Pietsch said that even excluding extraordinary items, sales in the quarter were up over 2018. He credited the gain to a mix of frontlist and backlist titles, as well as to a solid performance from Little, Brown Books for Young Readers. Another contributor to the gains in the quarter was continued growth in downloadable audio sales.
For all of Lagardère Publishing, total revenue, including extraordinary items, rose 4.1% in the quarter, to €460 million. Lagardère said that throughout the publishing group, e-book sales were flat in the quarter compared to last year’s first period, while digital audio sales accounted for 3.8% of revenue, up from 2.5% in the first three months of 2018.
Sales at Simon & Schuster rose 2.5% in the first quarter over the same period in 2018. Operating income increased 6.3% to $17 million, reported S&S parent company CBS. Print books and digital audio led the sales gains. S&S CEO Carolyn Reidy said that the children’s publishing group drove the increase in print sales, with big performances from Five Feet Apart by Rachael Lippincott, which has been adapted into a feature film, and the newest Cassandra Clare book, The Red Scrolls of Magic. Reidy noted that a number of the company’s best-performing titles in the quarter were carryovers from 2018.
Sales of audio were up 7% in the first quarter, a growth rate that is smaller than it’s been over the past several years, but Reidy said the modest gain was due in part to the mix of titles and that she still expects audio to be a robust segment. The increase in sales of digital audio offset declines in e-book sales, keeping overall digital revenue even with the first quarter of 2018.
Operating Performance, First Quarter 2018–2019
|Houghton Mifflin Harcourt Books & Media|
|Adjusted EBITDA||($0.8)||$4.2 –|
|Simon & Schuster|