Reader's Digest Association said revenue in the second quarter totaled $84.5 million, down 22 .5% from the quarter a year earlier as a result of a shrinking portfolio, declining subscription renewals, lower books sales and a decline in advertising in Canada.
The company reported an operating loss of $93.2 million, reflecting a write-down of $113.4 million due to "changes in our long-term views due to lower than expected revenue and operating results" and "declines in prevailing market conditions in publishing and direct-marketing industries," it said.
Over the past year the company has sold Every Day With Rachael Ray magazine, the formerly high-flying food title, and Allrecipes.com, the large food website, as part of its latest effort at transformation. It also shut down Fresh Home, a 2009 launch aimed at the young and budget-conscious.
But the road hasn't been easy, the company acknowledged today. "While there were some bright spots, which we believe were driven by our strategy to focus on our core businesses, our second quarter results were disappointing when compared to the year-ago period," CEO Robert Guth said in a statement.
Reader's Digest Association told staff last Friday that Dan Lagani, president for North America since June 2011, was leaving the company. Mr. Guth assumed Mr. Lagani's responsibilities, including responsibility for the flagship Reader's Digest.
Reader's Digest magazine remains one of the largest titles in the U.S., averaging paid and verified circulation of nearly 5.6 million over the first half of the year, according to its latest report with the Audit Bureau of Circulations. Total paid and verified circulation slipped 1.3% from the half a year earlier as newsstand sales fell 9.7%.
Ad pages in the issues from January through August increased 12.9% from the period a year earlier, according to the Media Industry Newsletter.