Despite working in something of a state of limbo caused by its pending purchase by Penguin Random House, Simon & Schuster had a solid first half of 2021 and the good results carried into the third quarter ended August 31, 2021, with sales rising 15% over the comparable period in 2020. Revenue hit $321 million, up from $279 million a year ago, and profits jumped 66%, to $93 million. “It was a stellar quarter on our way to an outstanding year,” CEO Jonathan Karp told PW.
The earnings announcement came two days after the Department of Justice filed suit to block PRH’s purchase of S&S from its parent company ViacomCBS. Karp said that the strong results posted since the acquisition was announced last year were a credit to the ability of the publisher’s employees to stay focused on working for their authors, adding that he doesn't expect that focus to change as the court case proceeds.
The children’s division, which had flat sales in the second quarter, led the increase in the third quarter, with sales up 19%. Karp credited the depth of the S&S children’s list for the gains rather than one blockbuster title, pointing to such titles as Chicka Chicka Boom Boom by Bill Martin and Good Night, Good Night by Sandra Boynton.
Sales in the international group rose 12% driven by what Karp said was a terrific year in the U.K., where Dave Grohl’s The Storyteller has been a huge hit. Adult sales were up 12%, as It Ends with Us, The Last Thing He Told Me, American Marxism, Peril, and Billy Summers were among the titles that sold well in the quarter. Sales in the distribution group also rose by double digits.
Karp said he didn’t think the strong quarter was due to early buying by consumers, saying that he sees a very healthy sales environment. “People are buying and reading books,” he said, noting the S&S already has two titles that have already sold more than 1 million copies-American Marxism and The Last Thing He Told Me.
Karp is confident S&S will close out the year with a strong finish. Anthony Doerr's Cloud Cuckoo Land has a had strong start, and Karp sees big things ahead for such titles as Book of Magic by Alice Hoffman and Taste by Stanley Tucci. The children’s group has already had a #1 hit, with Benjamin Alire Sáenz's Aristotle and Dante Dive into the Waters of the World.
In its third quarter filing with the SEC, ViacomCBS said it, along with PRH, believe the DoJ claims are without merit and "we intend to defend against them vigorously." The filing notes that the sale agreement provides for a termination fee payable to ViacomCBS "in certain circumstances in the event the Transaction does not close for regulatory reasons."
