MSLO Q3 Net Loss Rises as Revenues Spiral Downward
NEW YORK-The third-quarter net loss for Martha Stewart Living Omnimedia (MSLO) widened to $10.9 million from $4.3 million in last year's third quarter, as revenues from all three business segments fell.
Total net revenues in the quarter, which ended on Sept. 30, were $29.8 million, down 11.9 percent. Merchandising revenues (which include the company's home furnishings programs with several retailers) slipped 3.3 percent, while publishing revenues fell 17.6 percent and broadcast revenues (now by far the smallest sector of the business) dropped 52.7 percent.
Dan Dienst, MSLO's CEO, said the results were expected from what is usually the weakest quarter in the company's fiscal year, "but do not reflect the current transformation taking place at MSLO." Dienst cited the company's recent partnership with Meredith Corp., through which Meredith will lead the advertising sales, circulation, production and other noneditorial functions at Martha Stewart Living and Martha Stewart Weddings magazines, and on marthastewart.com and marthatstewartweddings.com.
MSLO was also able to make significant cuts in its costs. Production, distribution and editorial expenses were down 15.6 percent, selling and promotion expenses fell 12.7 percent and general and administrative expenses dropped 8.3 percent.
Referring to the Meredith partnership, Dienst said it is "immediately accretive to earnings and a winning relationship for our consumers as well as our valued shareholders. Starting Nov. 1, MSLO will be a refocused content and design company with a strong foundation built on long-term profitable growth."