Wiley’s net income of $50.7 million was down over 5 percent in their fiscal second quarter, falling more than sales, which declined less than 1 percent, at $447 million. The company lowered their sales guidance for the year, from mid-single-digit growth to low-single-digit-growth, while keeping their earnings forecast the same. It’s “the slowdown in education [that] continued to weigh on overall results,” ceo Stephen Smith said in the release. On the reduced earnings, the company cited “technology spending to support investments in digital products and infrastructure and facility costs related to consolidation of operations.”
The professional/trade division “continues to perform as expected in this cautionary retail environment.” Smith added, “We are pleased to see an end to the Borders liquidation sale, which adversely impacted sales at other retailers through much of the first half of the fiscal year. The transition to e-books is accelerating, and gross margins showed improvement this quarter.”
At $112 million, professional/trade sales declined 1 percent, “due primarily to softness in the consumer line, particularly cooking and travel.” At $9 million, ebook sales were up $5 million from last year, comprising 8 percent of sales overall. The p/t unit’s direct contribution to profit grew 6 percent, to $31 million, “reflecting top line results, higher gross margins from digital products, and cost control.”