Accusations of insider dealing surrounding US lifestyle guru Martha Stewart appear to be taking their toll on the company that bears her name.
Publisher and TV group Martha Stewart Living Omnimedia has warned Wall Street that its fourth-quarter earnings will be around 3 cents per share, far lower than the 10 cents expected.
The company blamed the profits warning on “uncertainty” over its stock price – the biggest threat to which appears to be the reputation of Stewart herself. Since June, when the homemaking queen and MSLO chief executive was first publicly implicated in alleged insider trading, shares have nose-dived 53%.
For the third quarter, net profits plummeted 42% year-on-year to $2.77m (€2.78m; £1.8m), while revenues increased 4% to $70.9m.
Revenues from television dipped by $0.2m to $6.4m as ad sales and ratings declined, but publishing revenues rose 5% to $46.5m and merchandising revenues surged 21% thanks to increased royalties from MSLO’s deal with Kmart.
Data sourced from: Financial Times; additional content by WARC staff