HarperCollins global revenue drops 10% with profits down 45% owing to lower book sales

HarperCollins’ global revenues dropped by 10% in the financial year ending 30th June, with profits down 45%, according to figures from parent firm News Corp.

Global book publishing revenues stood at $1.98bn (£1.56bn), compared to $2.19bn (£1.73bn) in 2022. For the three months ending on 30th June 2023 (fourth quarter), revenues stood at $446m (£351m), down 13% from $513m (£404m). Results at the UK division were not broken out.

The report said the decrease was "primarily driven by lower book sales owing to lower consumer demand industry-wide, weak frontlist performance and Amazon’s reset of its inventory levels and rightsizing of its warehouse footprint, which was mostly reflected in the first half".

Moreover, digital sales decreased 5% compared to the year before, driven by lower e-book sales. Digital sales represented 22% of consumer revenues for the year compared to 21% in the year before. Backlist sales represented approximately 60% of total revenues in the year.

Earnings before interest, taxes, depreciation and amortisation for fiscal 2023 decreased 45% to $167m (£132m) from $306m (£241m) the year before primarily owing to lower revenues and higher manufacturing, freight and distribution costs related to ongoing supply chain challenges and inventory and inflationary pressures, partially offset by lower costs owing to lower sales volumes and lower employee costs, the report said. At the beginning of 2023, HarperCollins c.e.o. Brian Murray told staff of plans to reduce the company’s US workforce by 5% before the end of the financial year. 

The report added: “These supply chain challenges and inventory and inflationary pressures are expected to continue to impact the business in the near term, but are expected to moderate in fiscal 2024.”

Speaking to Publishers Weekly, Murray said: “It was a challenging year. The numbers don’t paint a rosy picture.” However, he said he feels optimistic that the worst is over, and echoed what he said at The London Book Fair earlier this year that “the industry is finding its equilibrium”. “I’m feeling better about things," he said.

News Corp as a whole posted total revenues of $9.88bn (£7.77bn), a 5% decrease from $10.39bn (£8.17bn) in 2022.