BuzzFeed, long the darling of native digital publishing models, is hitting its brakes following a weakening of advertising demand. The company said it is laying off about 100 employees in the U.S. -- less than 10% of its global workforce -- and restructuring its advertising sales organization “amid a tough digital media market.” In an email to the company's staff, CEO Jonah Peretti announced Greg Coleman is stepping down as BuzzFeed’s president and would take on an advisory role. BuzzFeed News Editor-in-Chief Ben Smith said cuts will not affect BuzzFeed’s U.S. news team directly. Click Read More below for additional information.
With a 52% decline in its children’s book publishing and distribution group, total revenue fell 33% at Scholastic in the quarter ended August 31, compared to the same period a year ago. Sales in the first quarter of fiscal 2018 were $189.2 million, down from $282.7 million in the first period of fiscal 2017.
The decline was due to a lack of a blockbuster title that could compare to sales of Harry Potter and the Cursed Child, which was released during the first quarter of last year.
Sales in Scholastic’s trade unit plunged 60% in the quarter, falling to $46.7 million from $116.9 million. While Scholastic CEO Dick Robinson pointed to a number of bestselling new titles in this quarter, including Dav Pilkey’s Dog Man: A Tale of Two Kitties, revenue from those books was not nearly enough to offset the revenue derived from Cursed Child last year.
Overall revenue in the children’s publishing and distribution group (which includes the trade unit), fell 52% as sales in book clubs and book fairs fell 6% and 2%, respectively.
The decline in total company revenue contributed to an operating loss of $101.8 million in the quarter, up from $62.5 million in the first quarter of 2017. One-time charges of $8.3 million also added to the higher loss. Net loss rose to $63.7 million, up from $39.6 million in the first quarter of fiscal 2017.
In its other major segments, sales in the education group fell 18%, to $45.0 million, which Scholastic attributed to the timing of orders for customized curriculum product. Partially offsetting this decline was higher sales of professional learning products and services.
International group revenue in the quarter was also affected by last year’s overseas sales of Child; sales in the group dropped 14%, to $77.4 million.
Despite the sales decline in the quarter, Scholastic said it still expects to finish fiscal 2018 with revenue between $1.65 billion and $1.70 billion. In fiscal 2017, Scholastic had sales of $1.74 billion.