AAP July 2024 StatShot Report: Overall Publishing Industry Up 18.1% for Month of July, and Up 7.6% Year-To-Date

For the Second Quarter of Fiscal 2020 *Net sales decreased 26.3% to $1.2 billion compared to $1.7 billion in the second quarter of fiscal 2019 due to the impact of COVID-19. *Comparable sales (sales for stores open at least 14 months, including stores temporarily closed due to COVID-19, and e-commerce sales) decreased 26.7% compared to an increase of 6.2% in the second quarter of fiscal 2019. In the second quarter, transactions declined 36.2% and average ticket increased 14.9%. *Gross profit decreased to $329.0 million compared to $605.9 million in the second quarter of fiscal 2019. As a percentage of net sales, gross profit decreased to 26.8% compared to 36.4% in the second quarter of fiscal 2019, primarily due to deleverage of fixed costs due to lower sales, channel mix shifts, deleverage of salon expenses due to lower sales, and an increase in inventory reserves. These pressures were partially offset by lower promotional activity. *Operating income decreased to $12.8 million, or 1.1% of net sales, compared to $208.0 million, or 12.5% of net sales, in the second quarter of fiscal 2019. Adjusted operating income was $54.9 million, or 4.5% of net sales. *Net income was $8.1 million compared to $161.3 million in the second quarter of fiscal 2019. Adjusted net income was $41.5 million compared to adjusted net income of $159.0 million in the second quarter of fiscal 2019.

Print continues to be the preferred media for magazine and book readers, challenging conventional industry thinking that digital is dominant. There’s little doubt that the global media and publishing industries are putting a lot of effort into pushing readers online. Whether it’s books, magazines, newspapers or advertising, the vast majority of investment is being made into the virtual rather than the physical, with companies focusing solely on digital at the expense of print. But it seems that readers are pushing back against the rising swell of digital content, continuing to show love for the traditional format and its many benefits. This love has been demonstrated in a number of recent studies, which show the enduring popularity of print magazines around the world and record-breaking figures for print book sales.

Penguin Random House’s attorneys responded today to the Department of Justice’s efforts to block its acquisition of Simon & Schuster, attacking the government’s main complaint, that the purchase would “likely result in substantial harm to authors of anticipated top-selling books and ultimately, consumers.” In filing its suit to block the deal November 2, the DOJ said that a combined PRH-S&S, along with HarperCollins, “would collectively control more than two-thirds of this market, leaving hundreds of authors with fewer alternatives and less leverage.” PRH attacks this charge on several levels and begins by calling the theory of a “top-selling” category “fiction,” noting that the government doesn’t even identify what size of an advance it is referring to. “The publishing industry does not divide the market for book rights into distinct categories based on the author’s compensation for the book,” PRH’s lawyers said.” “The royalty advance for a proposed book is driven mainly by the reader demand a particular editor anticipates for that particular book.”