Lee Enterprises Reports 7.1% Revenue Decline and $16.2 Million Net Loss in Q1 FY 2025

Lee Enterprises, Incorporated reported a significant decline in financial performance for the first quarter of fiscal year 2025, ending December 29, 2024. The company recorded total operating revenue of $144.6 million, a decrease of 7.1% from $155.7 million in the same period last year. This decline was primarily driven by reductions in both print and subscription revenues, which fell by 18.7% and 16.3%, respectively. In contrast, digital subscription revenue increased by 10.8%, reaching $21.6 million, reflecting a growing digital subscriber base that now totals 774,000.

The company's operating expenses remained relatively stable, totaling $149.0 million, a slight decrease of 0.2% compared to the previous year. Notably, compensation expenses rose by 1.0% due to investments in digital talent, while costs for newsprint and ink decreased significantly by 25.3%. Despite these efforts, Lee Enterprises reported an operating loss of $3.4 million, a stark contrast to the operating income of $7.8 million recorded in the prior year. The net loss for the quarter was $16.2 million, resulting in a loss per share of $2.80, compared to a net income of $1.2 million and earnings per share of $0.12 in the previous year.

Strategically, Lee Enterprises continues to focus on enhancing its digital offerings and expanding its market presence. The company has made investments in technology and talent to improve user experience and content delivery. Additionally, the company is leveraging its digital marketing services agency, Amplified Digital, and its software as a service platform, BLOX Digital, to drive revenue growth. These initiatives are part of a broader strategy to transform Lee into a sustainable local media organization, emphasizing digital subscriptions and advertising solutions.

Operationally, Lee Enterprises has seen a shift in its revenue composition, with digital revenue now accounting for 50.8% of total operating revenue. The company is actively working to grow its digital audience and improve engagement through various initiatives. However, the overall decline in print advertising and subscription revenues continues to pose challenges. The company reported a decrease in cash flow from operating activities, totaling a cash requirement of $7.3 million for the quarter, compared to a slight cash generation in the previous year.

Looking ahead, Lee Enterprises anticipates that its ongoing investments in digital platforms and marketing solutions will help stabilize and potentially grow its revenue streams. The company remains committed to enhancing its digital subscription offerings and expanding its advertising services to local businesses. Despite the current challenges, management believes that these strategic initiatives will position the company for future growth and improved financial performance.