The cost of launching a new TV show has resulted in widening losses at Martha Stewart Living Omnimedia.
Ms Stewart is as popular as ever despite he stint in jail
The US lifestyle guru's company said net losses had risen to $33.5m (£19.2m) for the three months to June, from $17.8m at the same time last year.
Omnimedia said its new syndicated TV show and other charges had resulted in $16.7m being wiped off its accounts.
But it added that now its founder was out of prison, advertising at its key magazines had picked up.
Despite being released from jail earlier this year, Ms Stewart still remains under house arrest for her part in a shares scandal.
The group said ads in publications such as Martha Stewart Living had increased by 42%.
The boost helped raise revenues at the firm to $46m, from $44m a year earlier.
Looking ahead, Omnimedia expected "significant improvements", chief finance officer James Follo said.
"We expect to report significant year-over-year improvements in the second half of 2005 operating results, reflecting continued improvements in circulation and advertising revenues, the September launch of new television and radio programmes, as well as the benefits associated with our Kmart contract," he said.
The group expects operating losses to narrow to between $25m and $26m during the current third quarter, and $1m to $2m in the fourth quarter - warning it would face a charge of $13m during each three month period.
The news came as the media and merchandising firm said it had agreed a deal with Discovery Communications to carry Ms Stewart's upcoming daytime TV show - Martha - and air a new home improvement reality show.
The two groups did not reveal financial details of the deal which, means the programmes will be broadcast on Discovery's US TV channel The Learning Channel.
Ms Stewart's profile - and that of her company - has experienced something of a renaissance since the start of the year.
Despite being a jailbird at the start of 2005, the spell in prison seems to have boosted her profile. She was even named one of Time Magazine's top 100 most influential people in 2005.
She has agreed a $2m book deal and her firm is launching new "how-to" DVDs, a radio channel and new merchandising deals - all of which have helped Omnimedia's share price triple over the past year.