Benefiting from increased sales of higher margin products, Advanced Marketing Service reported that net income for the third quarter ended December 26, 1998, increased 50%, to $6.8 million, while revenues rose 12%, to $168.2 million. Also giving a boost to earnings was a relatively low return rate, which held at 19%, the same level as in the third quarter of fiscal 1998.
AMS president Michael Nicita said that, in the quarter, higher sales of basic reference books and children's books offset lower sales of bestsellers and cookbooks. Higher international sales, including an improved performance from its U.K. subsidiary, Aura Books, also helped improve results.
For the nine-month period, net income was up 37%, to $10.8 million, on a 15% sales gain, to $381 million.
The company also announced that it is closing down its Media Merchant and Publishers Outlet stores. The stores were launched to sell unsold nonreturnable titles and books from AMS's in-house publishing program; at one point there were 15 outlets. According to Nicita, AMS decided to close the stores after it determined that it was more efficient to sell the merchandise to remainder houses and other brokers rather than through stores. The 10 remaining outlets should all be closed in about three months.
