Barnes and Noble reported its first quarter earnings (for the three months ending Aug. 1) before the markets opened today. The nation’s largest bookselling chain reported revenues from its retail segment for the quarter of $955 million, a decline of 5.3% from the same quarter a year ago. But the company beat analysts’ projections by cutting its losses from $1.56 per share in the same quarter a year ago to 56 cents per share, and investors responded to the positive trend by pushing Barnes & Noble’s stock price to $24.40, a new 52-week high.
Same store sales were down 5.3% versus the same quarter a year ago, but when losses associated with the winding down of Barnes & Nobles’ Nook ebook device are taken out of the equation, comparable store sales were down just .4%. Although no definitive progress was reported in Barnes & Nobles’ efforts to sell its Nook Unit to Target or Walmart or some other entity that wants to take on Amazon (Kindle) and Apple (iPad), B&N CEO Michael Huseby reiterated that the company plans to shed its money-hemorrhaging Nook unit by the end of March 2015.
B&N recently partnered with Samsung to produce a hybrid Nook/Samsung tablet (though B&N committed to buying just 1 million of the devices), and the bookseller appears to be intent on divesting itself of the Nook, though it has still not revealed how it plans to extricate its potentially profitable College Bookstore division from the Nook Unit where it was put in an effort to lure investors (see "Games, Collectibles Up at Barnes & Noble").
Huseby told a conference call of analysts that retail sales were aided by improving market trends, merchandising initiatives and in-store promotions, most notably B&N’s "Get Pop Cultured" campaign to take advantage of movie and TV-related books. The book market in the U.S. does appear to be in the midst of a bit of a turnaround, driven largely by sales of YA books, with the N.Y. Times reporting that revenue from trade sales grew by 6% in the first quarter of 2014.
Even if it eventually manages to ditch its Nook Unit, Barnes & Noble still faces brutal competition from online giant Amazon. Late this summer B&N teamed up with Google in an experiment testing the market for same day delivery of books, and B&N has installed "print-on-demand" machines in many of its stores in the Northeast, so that customers can print out obscure titles that the store does not have to stock.
Stock Rises as Losses Decline
Posted by ICv2 on September 9, 2014 @ 3:18 pm CT
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