HarperCollins global revenues shrink 14% driven by lower sales in US market

HarperCollins global revenues shrank 14% to $531m (£439m) in the three months to 31st December 2022 compared with the same period the year before. The publisher said this was driven by lower print and digital book sales primarily in the US market due to slowing consumer demand industrywide. 

Figures from parent firm News Corp showed book publishing revenues decreased by $86m (£71m) from $617m (£510m) in the same period in 2021. Segment earnings before interest, taxes, depreciation and amortisation (EBITDA) decreased by 52% to $51m (£42m) from $107m (£88m). UK results were not broken out.  

News Corp said the decline was also due to “difficult frontlist comparisons, the negative impact of foreign currency fluctuations and some logistical constraints at Amazon”. It added: “Softness in consumer demand is expected to continue in the near-term."

Digital sales decreased by 7% compared to the corresponding period last year driven by lower e-book sales. Digital sales represented approximately 19% of consumer revenues, as compared to 17% in the corresponding period of fiscal 2022, and backlist sales represented approximately 57% of total revenues during the three months ended 31st December 2022, the publisher said.

The impact of foreign currency fluctuations of the US dollar against local currencies resulted in a revenue decrease of $22m (£18m), or 4%, for the three months ended 31st December 2022 as compared to the corresponding period of fiscal 2022.

The drop in EBITDA was also blamed on lower revenues as well as "higher manufacturing, freight and distribution costs related to ongoing supply chain, inventory and inflationary pressures, partially offset by lower costs due to lower sales volumes and lower employee costs".  

News Corp said supply chain, inventory and inflationary pressures are “expected to continue to impact the business in the near term”. To mitigate these pressures, the company said it has implemented price increases, will reduce headcount and continue to evaluate its cost base.

In January The Bookseller reported HarperCollins was set to cut 5% of its North American workforce before the middle of the calendar year due to “unprecedented supply chain and inflationary pressures” as well as declining sales. However the UK side of the business is not as badly affected. Charlie Redmayne, UK c.e.o., told The Bookseller this week he thought costs may have peaked. “Inflation will come down, energy costs are stabilising and freight costs have come down considerably – not quite back to their pre-Covid levels but not far off.”

On 9th February HarperCollins announced it had reached a "tentative" agreement with its union in the US, which has been on strike for 66 business days over contracts and pay.