Barnes & Noble reported its first year earnings on Thursday, and while it met earnings expectations (without exceptional items), it reported that same store sales dropped 1.5% during the period.  The company also said that it expects same store sales for the year to be slightly negative instead of slightly positive, due to the challenging retail environment and its first quarter results.  The sales drops will be worst in the second quarter, when the year ago period included the release of Harry Potter and the Deathly Hollows.  


This is an early indication that economic conditions will affect book sales, although it's unclear that graphic novels will be affected, particularly since manga, which makes up a big portion of graphic novel sales in bookstores, is at the low end of book prices. 


The B&N loss for the period was $2.2 million, primarily due to a settlement with the state of California on sales tax on sales from its Website in past years.  Over-all sales for the chain were up slightly, due to a higher number of stores.


Barnes & Noble also confirmed that it is looking at acquiring Borders (see “B&N Looking at Borders”).