Barnes & Noble’s overall sales declined 2.7% in the quarter ended November 1, but in its bookstore and online segment, after the decline in Nook sales is excluded, it eked out a .5% same store sales gain. With the Nook decline, sales declined 3.6% in the segment. The company is calling for sales declines “in the low single digits” for the full year.
Barnes & Noble earned $12 million, vs. earnings of $13 million in the year-ago period. The pain from the Nook meant that both revenue and profits for the quarter were below expectations; the stock dropped 5.4% on the news. The company beat expectation in its last quarter (see "Barnes & Noble Slows the Bleeding"), so it’s hard to say there’s a real trend.
The company also announced that it is buying out the Microsoft interest in the troubled Nook division for $125 million (half in stock) and a shot at a share of any proceeds if the division is sold in the next three years. Microsoft paid $300 million for that share just a few years ago (see "Microsoft Investing $300 Million in Barnes & Noble Subsidiary"). Pearson also owns a small share (see "Pearson Invests in Nook"); it has the right to take the same deal as Microsoft. Removing other owners gives Barnes & Noble more flexibility to do transactions with the Nook business, including possibly spinning it off or selling it.
As Nook Pain Continues, Microsoft Exits
Posted by ICv2 on December 5, 2014 @ 2:52 am CT