Martha Stewart Living Omnimedia's third-quarter loss widened on lower revenue and a continued slump in advertising in its publishing division, the company's most profitable department. Each of the core elements of its business was hit with losses, including merchandising as the company transitions out of its lucrative deal with Kmart.
For the third quarter, the company posted a loss of $12.1 million, or 22 cents a share, compared with a loss of just $3.7 million in last year's third quarter. Total revenue decreased 25% to $49.8 million. Ad revenues in the company's magazines declined by 22% and a slump in newsstand sales and subscriptions was also noted. MSLO's merchandising division saw sales fall by 39% this quarter as the segment's profit dropped by 59%.
On the up side, the company has expanded its retail business by incorporating new relationships with Home Depot and PetSmart in recent months with the announcement of exclusive products at these stores. These partnerships, in conjunction with new product launches by Hain Celestial Group (Martha Stewart Clean) and an expansion of the company's line of prepared foods, are expected to help bolster merchandising revenue.
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