Operating profit in Reader's Digest's global books and home entertainment segment rose 62% to $80.8 million for the fiscal year ended June 30, 1999, while sales fell 8% to $1.54 billion.
RD reported earnings in the book and home entertainment group rose due to improved profitability in the U.S., U.K. and Germany, which offset losses in Russia. In the U.S., RD cited significant reductions in promotion and overhead costs as major factors for the division's higher profitability, while higher customer response rates led to better results in Germany. In the U.K., improved profits reflected promotion cost reductions in general books and the elimination of unprofitable product lines.
For the entire company, net income doubled in the year to $104.5 million on a 6% decline in sales to $2.53 billion.
RD chairman Thomas O. Ryder said that during fiscal '99 the company made "significant progress toward our goal of becoming the smaller but more profitable company that we promised will be the foundation for our long-term growth." Ryder noted that in fiscal 2000 he expects further significant improvement in operating profit and single-digit revenue declines in RD's core businesses.
