Roger Lynch, former head of Pandora Media Inc. who was appointed CEO of Condé Nast in April, discussed the outlook in a videoconference with employees on July 26. The meeting was leaked to reporter Kali Hays at WWD, which broke the story.
Condé Nast declined to comment on the WWD report.
In the town hall-style video, Lynch said Condé Nast expects U.S. revenue growth of 0.3% this year, missing an earlier target of 4%. He said the revised estimate was because of “headwinds in other areas, like display [advertising], where prices have come down pretty substantially,” WWD reported.
Lynch showed a graph without dollar amounts that indicated the company’s combined U.S. and international business will end the year with a profit — after posting a loss in the first half. The loss came from its U.S. operations, while the international group has been profitable since the second half of 2018.
The forecast indicates that Condé Nast’s business has stabilized since losing $120 million in 2017, which led the company to cut costs and sell three of its 14 magazines: W, Brides and Golf. Former Condé Nast CEO Bob Sauerberg resigned last year as the company merged its U.S. and international operations and began searching for a new global leader.
Lynch began his tenure as CEO with a tour of its operations that culminated this week with a reorganization of management. Among the announced changes, Anna Wintour added the title of global content adviser to her existing roles as U.S. artistic director and EIC of Vogue.
The new CEO's video presentation showed that among Condé Nast’s titles, Vogue hauls in 28% of revenue, followed by GQ at 13%. The New Yorker and Vanity Fair each supply 10%, and Architectural Digest and Wired add 6% each. Glamour, Bon Appetit/Epicurious and Allure each generate 5% of revenue, while Condé Nast Traveler pulls in 4%.
Digital-only brands, including Pitchfork and Self, make up the remaining sales.
Lynch also discussed revenue estimates by region. EMEA (Europe, Middle East, Africa) is forecast to grow 3% this year, missing an earlier target of 4%, while Latin America will see a 3% gain, much less than the 15% planned. Asia-Pacific’s projected 11% gain will outdo its 4% goal.
Condé Nast's U.S. operations are responsible for 56% of total sales, followed by EMEA at 28%, Asia-Pacific at 15% and Latin America at 1%.
By segment, print advertising is forecast to make up 36% of sales, followed by web advertising at 24%, consumer at 18% and video at 11%. The remaining “other” category, which includes live events and direct-to-consumer merchandising, brings in 11% of sales.
“We have tremendous consumer engagement globally, and it’s growing,” Lynch said in the video. “Some [areas] don’t monetize right now as well as print. This includes video and audio, which is a big opportunity for us.”