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Martha Stewart Living Reports Wider Q3 Loss

Oct 28, 2004  •  Post A Comment

Martha Stewart Living Omnimedia on Thursday reported a wider third-quarter loss, as the lifestyle company continued to suffer from the legal troubles surrounding founder Martha Stewart. Ms. Stewart started her five-month federal prison term earlier this month.

MSO reported a third-quarter loss of $15 million, compared with year-earlier red ink of $3.9 million. Revenue tumbled 24 percent to $38.7 million.

The company’s television business continued to experience steep revenue declines, falling 67 percent to 2.2 million in the quarter as a result of lower licensing fees and advertising revenue associated with the discontinuation of the company’s flagship daily television series, “Martha Stewart Living,” which shut down production in September.

Despite the continued weakness, MSO officials maintain that they think the company’s fortunes will improve beginning in the second quarter of 2005, by which time Ms. Stewart is expected to be released from a federal prison and can resume working at the company.

Another factor leading to the company’s sanguine outlook is its relationship with reality TV guru Mark Burnett, who in September agreed to consult with MSO on the development and launch of new television programs, including a prime-time series that could launch in the fall of 2005.