HBG Reports Earnings Jump Despite Sales Drop

Sales for the first six months of 2016 fell 6.6% at Hachette Book Group, compared to the first six months of 2015, parent company Lagardere reported.

Despite the revenue dip, HBG’s CEO Michael Pietsch said profits jumped 180%. He attributed the uptick to “disciplined cost management.” Revenue and earnings comparisons exclude the purchase of Perseus’ book group, which HBG completed at the end of March. (In its six-month presentation, Largardere observed that Perseus was “contributing according to plan.”)

In comments on the first half performance, Pietsch took note of the “tremendous change and growth” in the six-month period. In addition to the purchase and integration of Perseus, the company opened a new HBG warehouse. It added of a large new distribution client. It created a joint venture for HBG’s Yen Press imprint with Japanese manga publisher Kadokawa. It also launched James Patterson’s new imprint, BookShots.

HBG reported that new books leading sales in the first six months included James Patterson and Maxine Paetro’s 15th Affair, David Baldacci’s The Last Mile, Harper Lee’s To Kill a Mockingbird, Lin-Manuel Miranda and Jeremy McCarter’s Hamilton: The Revolution, and Gwyneth Paltrow’s It’s All Easy.

At the corporate level, revenue at Lagardere Publishing rose to 970 million euros from 968 million euros in the first six months of 2015. Earnings before interest and taxes remained flat at 36 million euros. Outside of the U.S., sales rose 2.5% in France and 11.9% in Spain/Latin American, but fell 4.7% in the U.K.

E-book sales continued to be soft with the format accounting for 9.2% of Lagardere Publishing revenue in the first half of the year, down from 10.7% in the same period in 2015.
http://www.publishersweekly.com/pw/by-topic/industry-news/financial-reporting/article/71044-hbg-reports-earnings-jump-despite-sales-drop.html

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