• by Wayne Friedman , Erik Sass  @eriksass1, July 28, 2010

Strong merchandising results improved Martha Stewart Living Omnimedia financials -- but the broad-based media and marketing company still sat in red-ink for its second quarter.

Its net loss narrowed to $1.2 million from $6.4 million for second-quarter 2009. Revenues were down versus a year before to $55.3 million from $57 million. Of its four major units -- publishing, broadcasting, Internet and merchandising -- only the latter two groups showed gains.

Merchandising revenues went to $11.9 million, up from $9.0 million. Robin Marino, president and CEO of merchandising for the company, states: "We expanded our presence at The Home Depot, building on our offerings in the Outdoor Living, Storage & Organization and Paint categories."

Merchandising -- another important revenue stream -- grew 30% from $9 million to just over $11.8 million. Looking to the future, the company is building its licensing and merchandising partnerships with national retail chains including The Home Depot, Macy's and Michaels. Martha Stewart Pets line is also in nearly 1,200 PetSmart stores nationwide.

Internet business also showed gains -- improving to $4.7 million from $4.2 million. Internet advertising revenue was up 13%. MSLO's Web sites gained 9% in unique visitors versus the second quarter of 2009. Martha Stewart's Everyday Food app for the iPhone and iPod Touch has been downloaded more than 160,000 times since its mid-February launch.

In regard to publishing, while revenues were lower overall for the group, advertising pages in the August issue of Martha Stewart Living were up 29% year-over-year, and excluding the spring issue of Martha Stewart Weddings, ad revenue was up 3% compared to the prior year's quarter.

Broadcasting revenues was down, due to lower revenue from the syndicated "The Martha Stewart Show," as well as lower radio revenue and the absence of TurboChef in this year's quarter. (In 2008, TurboChef, an oven manufacturer, signed a three-year multiplatform marketing deal with MSLO).

Old and new shows are set to appear on Hallmark Channel this fall featuring the Martha Stewart brand name. Hallmark Channel also announced two, hour-long, prime-time specials celebrating Halloween and Christmas, as well as two prime-time interview specials, all hosted by Martha Stewart.