Bookstore Sales Had Small Six-Month Gain

Simon & Schuster was the only one of the country’s four largest trade publishers to show an improved profit margin in the first half of 2023 compared to last year. In reporting Penguin Random House’s first-half results last week, where sales rose 9.5% but profits were up less than 1%, interim global CEO Nihar Malaviya told employees the small earnings increase “should come as no surprise, as industry inflationary cost pressures and increased costs across our businesses have continued to impact us.” HarperCollins CEO Brian Murray noted earlier that in addition to higher manufacturing, freight, and distribution costs, the industry has faced macroeconomic headwinds that he hasn’t seen since the Great Recession of 2008. Profits fell 19.7% at Lagardère Publishing despite a 2.5% increase in six-month sales. In addition to inflationary pressures, Lagardère cited increased costs incurred on “transformation projects in France” as the reason for the earnings decline.

Firestorm Books, a collectively-owned radical bookstore in Asheville, N.C., has acquired 22,500 copies of 46 children's books that were banned from the Duval County Public School system in Florida. Under a campaign named "Banned Books Back!," the bookstore plans to distribute these books to children and families across the United States, starting with Florida. Last year, Duval County school administrators ordered the removal of numerous titles focused on gender issues, racism, colonialism and more. Half of the titles that were pulled focused on LGBTQIA+ topics. "When we were told that these books were at risk of being destroyed, we knew we had to act," Esmé Joy, co-owner of Firestorm Books, said.

Domestic revenue of $10.99 billion increased 1.2% versus last year. The increase was primarily driven by comparable sales growth of 2.0%, which was partially offset by the loss of revenue from permanent store closures in the past year. Domestic GAAP SG&A was $1.96 billion, or 17.9% of revenue, versus $1.95 billion, or 18.0% of revenue, last year. International revenue of $925 million decreased 7.8% versus last year. This decrease was primarily driven by the loss of revenue from exiting Mexico and a comparable sales decline of 3.0% in Canada. These items were partially offset by the benefit of approximately 450 basis points of favorable foreign currency exchange rates. International GAAP gross profit rate was 25.0% versus 19.0% last year. On a non-GAAP basis, the gross profit rate was 25.0% versus 22.6% last year.