Faced with difficult comparisons to the third quarter of 2018, when sales were boosted by some unique publishing events, all four of the large publicly held trade publishers saw sales fall in the quarter ended September 30.
Lagadère’s U.S. publishing subsidiary, the Hachette Book Group, had the best top-line performance of the four publishers in the quarter, with sales dipping only 0.3% from the third quarter of 2018. The small decline was attributed to strong sales last year of the frontlist title The President Is Missing and the backlist phenomenon You Are a Badass. According to Michael Pietsch, CEO of HBG, Talking to Strangers, a “strong program of adult thrillers,” and continued growth in downloadable audio partially filled the gap left by those bestsellers this year.
Pietsch was the most optimistic of the executives who commented on prospects for the fourth quarter, saying he expects a strong finish to 2019. He added that the fourth quarter is off to a good start, led by sales of Catch and Kill, The Night Fire, and The 19th Christmas, and noted that he has high hopes for titles ranging across the political spectrum, such as A Warning by Anonymous (the White House official who penned an op-ed in the New York Times saying he is part of the resistance) and Triggered by Donald Trump Jr.
Third-quarter revenue for all of Lagardère’s publishing group was up 9.1% over 2018, driven by a 12.2% increase in France and a 19.4% jump in Spain and Latin America.
Revenue at HarperCollins fell 3.1% in the quarter (the first period in HC’s fiscal 2020, which ends next June) and profits dropped 28%. The sales decline was attributed to the strong performances of a number of titles in last year’s first quarter, including Girl, Wash Your Face by Rachel Hollis, The Hate U Give by Angie Thomas, and The Subtle Art of Not Giving a F*ck by Mark Manson. Digital sales were also soft in the most recent quarter, falling 5% to about $85 million. (HC parent company News Corp did not separate the sales performance of e-books from digital audio.)
In a conference call discussing the results, News Corp CFO Susan Panuccio said that though HC has some strong new titles in the current quarter—such as a new Ree Drummond cookbook—the publisher still faces difficult comparisons to last year’s second quarter, when Joanna Gaines’s Homebody was a huge bestseller and HC’s backlist did very well. “Given the timing of the release schedule,” Panuccio told analysts, News Corp expects HC’s financial performance to be better in the second half of fiscal 2020.
Sales at Simon & Schuster fell 9.6% in the third quarter, largely due to the strong performance last year of Bob Woodward’s Fear: Trump in the White House. Despite the revenue decline, earnings rose by $1 million, to $52 million. S&S CEO Carolyn Reidy attributed the earnings increase to lower cost of goods and cost controls.
The absence of a title to match Fear led to a decline in print sales at S&S, and it also hurt sales in the publisher’s international group, as the book sold well in a number of countries. The bright spot in the quarter was the audio group, Reidy said, where sales of digital audio continued to rise.
Reidy is hoping for a solid fourth quarter, though she acknowledged that the company is facing more tough comparisons, as Fear sold throughout the holiday season. She said the big adult title for the holidays is likely to be a new edition of Joy of Cooking, which went on sale last week. Reidy added that she has high hopes for a number of children’s titles as well, including Keeper of the Lost Cities: Legacy by Shannon Messenger and Sulwe by Lupita Nyong’o.
The Houghton Mifflin Harcourt Books & Media group had the toughest quarter of the four companies, with sales down 28% and profits dropping 46%. The main reason behind the decline was the $16 million in licensing fees it earned last year for 1984 and Animal Farm, which were not repeated in this year’s third quarter. Books that sold well in the recent quarter included Antoni in the Kitchen by Antoni Porowski and Lori Gottlieb’s Maybe You Should Talk to Someone. In the children’s group, HMH’s Little Blue Truck franchise also did well.