Simon & Schuster couldn’t defy gravity forever: The publisher’s soaring results in the first half of 2022 slowed in the third quarter. Still, sales rose 10% in the quarter ended September 30, 2022, over last year’s comparable period to $353 million, while profits were flat at $93 million. For the first nine months of 2022, sales were up 19%, to $863 million, and earnings increased 29%, to $223 million. CEO Jonathan Karp said the nation’s third largest trade publisher is on track for another record year.
Karp credited the continued success of S&S, despite being for sale of more than two years, to “having the right books and at the right time," as well as "great execution” by all S&S divisions.
In the most recent quarter, higher costs finally caught up to S&S as it has with its major competitors, but Karp commended the company’s operations teams for “surmounting the challenges presented by economic headwinds.” The 10% sales gain in the quarter was led by S&S’s adult, audio, and international divisions, as well as its distribution business, which officially opened a new facility in Jackson, Tenn., in the quarter.
S&S has benefitted from four Colleen Hoover bestsellers, with the newest blockbuster It Starts with Us, released October 18, hitting #1 across S&S’s international territories and providing a great start to the publisher’s fourth quarter. The adult publishing group also had a major nonfiction hit in Jennette McCurdy’s I’m Glad My Mom Died, which has sold more than 1 million copies since its release in August. On the international front, S&S U.K. is having a record year and has new hits with A Pocketful of Happiness by Richard E. Grant and The Satsuma Complex by Bob Mortimer.
Karp said that despite sales slowing in the third quarter, S&S “continues to fire on all cylinders” in the fourth quarter. In addition to the new Hoover, a number of S&S titles tied to streaming-service shows, such as The Luckiest Girl Alive, have hit bestsellers lists, while Katy Hays's debut novel The Cloisters by Katy Hays has made a number of bestseller lists and been picked by several national book clubs. The company just released Bob Dylan’s newest book, and new titles are coming from Jerry Seinfeld and Mike Pence.
Unlike some major publishers, the solid financial performance has allowed S&S to go through its usual raise cycle, and the company is continuing to promote and hire, Karp said. Karp said he doesn’t think Monday’s decision to block S&S’s purchase by Penguin Random House will alter how company employees go about their business. “The best strategy to use when you are for sale is to keep your nose deep in your books,” Karp said. “Most of our conversations now are about our plans for 2023." He added that the publisher plans to celebrate its 100th anniversary in 2024.
