Helped by solid contribution from its U.S. division, revenue at Quarto Group rose 8% in the first half of 2016 over the comparable period in 2015. Total sales hit $73.3 million, and the company posted a profit of about $480,000 in the period. Quarto suffered a loss of $1.2 million in the first six months of 2015.
At Quarto Publishing Group USA, revenue increased 17%, to $31.7 million, while adjusted operating profit rose 39%, to $2.5 million. The division benefited from the February purchase of Harvard Common Press and continued strong sales of its adult art instruction/coloring books. Quarto warned, however, that it has started to see signs of “retail over-saturation” of adult coloring books, and that it believes sales in the category will “settle to a lower, more consistent level.”
Outside the U.S., first half sales in Quarto’s International Co-Editions Group rose 23%, to $18.5 million, led by children’s imprints and by Ivy Press, which was acquired in March 2015. A soft spot was the company's Australian-based books and gifts direct unit. There, sales declined and a small loss was posted in the first half period.
Quarto CEO Marcus Leaver was generally pleased with the performance and noted that he expects Quarto to do better in the second half of the year. He wasn’t concerned about the possible leveling off of adult coloring book sales, noting that another category will "jump up and take its place." He then added: "That is the value of not being a hit-driven publisher."
Leaver also pointed out that the majority of gains in the first half of 2016 were a result of internal growth, citing in particular the strong performance of Quarto's children’s group.
Moving forward, Leaver expects growth to come both from existing operations and acquisitions, the most recent of which is Quarto's acquisition on Monday of becker&meyer. Leaver added that the purchase of becker&meyer gives him even more confidence that Quarto will finish 2016 with a fourth straight year of growth.
