In the first quarter of 2022, sales and earnings at Simon & Schuster jumped 17% and 85%, respectively, over 2021, a performance that CEO Jonathan Karp said “defied gravity.” Despite a flat start for industry sales in the first quarter of 2023, S&S saw its 2023 sales get off to another fast start. Sales were especially strong in S&S’s domestic group, where all divisions had double-digit increases over last year’s first quarter. International sales were “a little above flat,” Karp said.
Overall, sales rose 19% in the quarter, to $258 million, and operating income increased 16%, to $58 million. However, the strong financial performance has not changed parent company Paramount Global’s intention to sell the publisher. In a conference call discussing first quarter results, CFO Neveen Chopra said Paramount has “restarted the sale process” and that Paramount believes it is possible a deal could close by the end of the year. Chopra also said that given S&S’s strong operating performance in recent years, Paramount believes it will get a good price for the publisher. Penguin Random House had previously offered $2.1 billion for S&S in a purchase that was blocked by the government.
As for the factors driving the publisher’s growth, Karp said while S&S is seeing “robust sales of classic backlist,” it's fiction that is really pushing sales, helped in no small way by social media platforms such as TikTok. “It is clear we are living in a boom in fiction,” Karp said, crediting much of that growth to the strong word-of-mouth recommendations made through TikTok and other social media platforms. One of social media’s strongest attributes is that consumer can buy a book instanteously, making it more likely readers will follow through on a purchase, Karp observed.
The authors leading the growth include a number of familiar names like Colleen Hoover, Laura Dave, and Taylor Jenkins Reid, and some newer ones such as Hannah Grace, author of Icebreaker, and The Way I Used to Be author Amber Smith. The Way I Used to Be was first published in 2016 by S&S’s Margaret K. McElderry Books imprint and began to pick up interest during the early days of the pandemic, Karp said. Sales continued to build to the point where now the book has over 500,000 copies in print, with S&S going back to press four times this year. Another important book for S&S in the quarter was Judy Blume's classic novel Are You There God? It’s Me, Margaret, which Blume began promoting early this year ahead of the recently-released movie adaptation.
No division performed better than the S&S audio group, where revenue went up 36%, bolstered by a number of frontlist trade titles and a 40% increase in sales in the Pimsleur Language Program. Karp called the Pimsleur “one of the jewels of the company.”
Karp is upbeat about prospects for the remainder of the year. He noted that supply chain issues have abated, particularly in terms of getting printing time. “The capacity is there,” he said. Among the many new books Karp is excited about is The Book of Charlie by David von Drehle. “If there is one book I could will onto the bestseller list, this would be it,” Karp said.
He was also unfazed by the expected news that Paramount Global has officially restarted the process of selling S&S. He noted that S&S has been for sale for three years, all of which have been record years. “We’ll keep our eye on the ball,” he said.
