Barnes & Noble reported that its comparable store holiday sales were up in 2018, especially for the weeks between Black Friday and January 1, for the first time in years but that it had to spend to get the sales increase.  Comp store sales were 4.0% for the period between Black Friday and January 1, and up 1.3% for the longer 9-week holiday period that ended December 29. 

The sales increases were due to a new ad campaign, improved website, a buy online and pick up in store initiative, and increased markdowns and sales, the company said. The advertising and price promotions cost money, so along with the bullish sales report, the company also warned that its earnings guidance might be reduced by as much as 10%.

The company had promised positive comps for the holidays and had begun to turn around sales last quarter, when it  reported same store sales down 1.4%, its best sales quarter since Q4 of fiscal 2016 (see “Toys and Games Up Double Digits at Barnes & Noble”).  Toys and games, which had double digit sales increases last quarter, were big contributors to the trend.

Investors didn’t like the earnings warning, pushing Barnes & Noble’s share price down over 15% on Thursday.