MSLO Third Quarter Conference Call Recap

At the end of each fiscal quarter, Martha Stewart Living Omnimedia, which is a publicly-traded company, hosts a conference call for its investors and for Wall St. analysts to review its business: earnings, losses, new partnerships, operational changes, etc. My friend Kenn, who is an MSLO investor, sat in on the call and provides a brief recap, below. Among the significant announcements  is the expiration of the deal with Avery and Staples and its Martha Stewart Home Office line, which will expire at the end of the year. Also significant is the announcement that MSLO is in talks with a Canadian retailer to bring some of Martha's home merchandise to Canadian store shelves! (This is obviously very exciting for me! Currently in Canada we have access only to her craft merchandise at Michael's, her line at Home Depot Canada and the aforementioned home-office line at Staples, which will be gone in 2015.) Please read Kenn's thorough review of the call. I think you will find it interesting.

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This call was all about preparing for the transition from a media business to a design and content creation company. This Saturday marks the start of a 'new' MSLO as the Meredith agreement goes into effect.

I'm not sure how many people are into the financials… but MSLO did show a loss for the quarter. The 3rd quarter is typically the weakest quarter of the year. Even with the loss, they did beat Wall Street estimates of 'how much loss,' though they did miss revenue estimates. You can read all the financial information via the website under investor relations.

There are several new merchandising opportunities:

An upcoming partnership with "Fat Head," a Michigan based company that specializes in wall art. Think very large repositionable decals for the wall.

There is an upcoming Home Fragrance line. This one surprised me since Martha has frequently mentioned how she doesn't like "scents" in the home.

An expansion of the Macy's line called "Whim Martha Stewart Collection." This will be a new line that is youthful and whimsical, instead of the traditional designs MSLO is known for. Think Blueprint, for those that remember the magazine. Macy's is also beginning distribution into Canada which is a significant opportunity for MSLO to reach consumers to our north. 

MSLO is also in negotiation with a company for a retail partnership in Canada.


In other Merchandising news:

Sales are soft at Home Depot. The partnership is still strong, but the sales are soft. Paint ended at the start of the 4th quarter. Outdoor furniture performed poorly this year. No news of any product expansion.

JC Penney continues to report strong consumer reaction to the Martha Window line. Holiday merchandise is now available on line and in stores. MSLO does NOT expect any merchandise expansion with JC Penney. 

MSLO did confirm the termination of the agreement with Avery. Staples stores will continue to sell existing inventory, though no new inventory is being produced. No new partnership for the Home Office line has been announced.

In Publishing, a new book, "Clean Slate" hits store shelves on December 16th. MSLO will continue to publish books. Book publishing is not part of the Meredith deal. 'One Pot' reached number 4 on the New York Times bestseller list. 

The December/January issue of Living, due out in just a couple weeks will be the last issue produced by MSLO.

In Television, viewership for Cooking School and Martha Bakes continues to be strong, with over 1.5 million viewers a week. The new season of Martha Bakes is currently under production and will air beginning in January, 2015.