By any measure, the first half of 2021 was a good period for trade book publishing. Revenue at the companies that report trade sales to the Association of American Publishers’ StatShot program rose 17.6% over the first six months of 2020; NPD BookScan reported that unit sales increased 18.5% in the period; and bookstore sales jumped 30% over what was a miserable first six months of 2020. So it comes as no surprise that the four publicly traded major publishers also posted strong increases in the period.
Of particular note is the fact that while sales were strong, profits were even better, with operating margins showing healthy gains. In general, the publishers cited higher sales of both backlist books and digital content, especially digital audiobooks, for the improved margins. Though supply chain issues and the uncertainty over the delta variant are causing some concerns about how the rest of the year will unfold, publishers are hoping that the increased interest in reading will carry over through the 2021 holiday season and beyond.
Also of note is the fact that, for the first time, HarperCollins’s results include Houghton Mifflin Harcourt trade group’s sales, after HC completed its acquisition of the business in early May. The HMH group contributed $23 million in revenue to HC in the first half of the year. June 30 also marks the end of HC’s fiscal year, which was a great one for the publisher, with total sales approaching $2 billion. Sales in first half of calendar 2021 were up 20% over the same period in 2020, a slightly faster growth rate than the 19% increase the company posted for the fiscal year.
HC CEO Brian Murray attributed the healthy gains in fiscal 2021 to higher consumer spending on books worldwide, saying that he has never seen such sustained increase in book buying in his more than 25 years in publishing. “The Covid tailwinds are real,” he added. Sales were up across all formats, and Murray was particularly heartened by strong growth in print sales in the U.S., which he believes is another sign book reading in general is on the upswing.
At Penguin Random House, profits soared 55.1% in the first half of 2021 over the first half of 2020, reported parent company Bertelsmann, while sales increased 10.9%. Total revenue for the period was €1.80 billion, or about $2.1 billion, up from €1.63 billion, while operating EBITDA (earnings before interest, taxes, depreciation, and amortization) jumped to €324 million, from €209 million a year ago. Sales in the U.S. increased 8.7%, to €1.08 billion.
Bertelsmann attributed the overall increases to solid sales of both frontlist and backlist books, as well as to “a continuing audio boom in nearly all territories.” In addition to the jump in audiobook sales, PRH “continued to benefit from the accelerated shift to online retail channels,” Bertelsmann noted.
While the regulatory review of PRH’s pending acquisition of Simon & Schuster continues in the U.S., growth in the first half of the year was aided by acquisitions made by the company’s Spanish-language subsidiary, Penguin Random House Grupo Editorial. Sales in PRH’s services operation—largely in its distribution business—rose 18.2%, to €52 million.
In a letter to employees, PRH worldwide CEO Markus Dohle pointed to “a strong book market in some of our large territories” and “the recovery from last year’s revenue losses due to the COVID-19 crisis in other regions” as contributors to the good performance in the first half of the year. He thanked PRH employees for working together during the pandemic, writing, “The remaining months of 2021 bring new areas to navigate: the development of hybrid work models and the opportunity to meet voracious customers’ demand for books.”
Acknowledging that last year’s second quarter was weak, Lagardère said that sales in its publishing group increased 16.4% in the first half of 2021 over the same period in 2020, to €1.13 billion, and EBIT soared to €110 million, from €27 million. Revenue at Hachette Book Group rose 14.8%. CEO Michael Pietsch said that hardcover sales were strong in the period and noted an overall good performance in children’s books and in the company’s Christian books business. HBG’s distribution business was “solidly ahead of 2020,” he added.
HBG was only one part of what was an overall good performance for Lagardère Publishing. Sales rose 26.9% in France and 17.3% in the U.K., while sales in Spain/Latin America fell 4.5% due to a decline in Mexican sales that offset “good momentum” in Spain, the publisher said.
Digital sales’ share of total revenue at Lagardère fell in the period, which the publisher attributed to tough comparisons with the first half of last year, when consumers turned to digital formats due to the pandemic. E-book sales fell from roughly €97 million in the first six months of 2020 to €90 million in the first six months of 2021, but digital audio sales rose to about €52 million, from €48 million.
Sales at S&S rose 9.2% in the first six months of the year compared to the first half of 2020, helped by a strong performance from its international group. CEO Jonathan Karp said the overseas units have ramped up production after curtailing output last year because of the pandemic.
In the U.S., sales were led by the adult group and audio. Karp noted that backlist sales were strong and that sales through physical stores, including Barnes & Noble, bounced back.