Playboy Net Loss Spurred by Catalog Income Decline
Playboy Enterprise Inc., Chicago, reported a net loss of $1 million for quarter ended March 31, a drop from net income of $60,000 a year ago.
First quarter revenue of $73.6 million rose 3% from $71.8 million.
The company attributed the loss to planned increased investments in Playboy Online and corporate marketing. The company also pointed to lower margins in entertainment due to the increase in costs to support the revenue growth plans for the remainder of the year.
The publishing division was the only one to show an increase in operating income between the quarters, with growth from $206,000 to $1.8 million. But much of this growth came from increased newsstand sales. Subscription sales declined 10%, which the company attributed partly to “the problem of direct marketing stamp sheet agents, which is affecting all publishers.”
Operating income from the Catalog Group fell from income of just over $1 million to a loss of $301,000, which the company attributed to soft response rates and lower circulation to the Critics’ Choice Video catalog.
While revenue increased 74% for the Playboy Online division, from $1.4 million to $2.5 million, the division showed a net loss of just under $2 million, compared with a net loss of $700,000.
