Barnes & Noble’s second quarter earnings weren’t all excellent news for the corporate — it reported a net lack of $6.6 million and an ever-so-slight dip in total sales from $1.90 billion to $1.89 billion — however it did have a good bit to boast about at the technology side of factors. Sales on its B&N.com website increased 17 percent year-over-year, totaling $206 million for the quarter, and the worth of the company’s Nook business (including devices and content) now stands at $220 million, up a whole 85 percent. The corporate also revealed that its new Nook Tablet was the fastest-selling Nook device thus far, although it is not providing any specific sales numbers, noting only that it expects to sell “millions of devices” during its third quarter. Additional figures are available on the source link below.
EBITDA Increases 21% over the Prior Year
Comparable Store Sales Increase 10.9% over the 3 Day Holiday Weekend
NOOK Tablet™ Becomes Fastest Selling NOOK™ Product
MANHATTAN–(BUSINESS WIRE)–Barnes & Noble, Inc. (NYSE: BKS) today reported sales and earnings for its second quarter ended October 29, 2011.
SECOND QUARTER SALES
Total sales decreased 0.6% in comparison to the prior year, from $1.90 billion to $1.89 billion. Barnes & Noble store (“Retail”) sales decreased 1% from $931 million to $918 million, with comparable sales decreasing 0.6%. Physical book sales declined, offset by increases in NOOK products and were positively suffering from the liquidation of the remainder Borders stores. Comparable store sales improved every month inside the quarter.
Barnes & Noble College (“College”) sales declined 4% from $797 million to $768 million, thanks to a shift from selling new and used textbooks to low cost, higher margin textbook rentals. Comparable store sales increased 0.4%. College comparable store sales reflect the retail selling price of a brand new or used textbook when rented, in preference to solely the charter fee received and amortized over the rental period.
BN.com sales increased 17% over the prior year, from $177 million to $206 million. Comparable sales increased 38%, on top of a 59% increase a year ago. This increase was driven by continued growth of digital content sales and purchases of award winning NOOK™ devices. BN.com comparable sales reflect the real selling price for eBooks sold under the agency model instead of solely the commission received.
SECOND QUARTER EARNINGS
Earnings before interest, taxes, depreciation and amortization (EBITDA) grew 21% over the prior year, from $46 million to $56 million.
Retail EBITDA grew from $1.3 million to $21.0 million, taking advantage of higher product margins this year. Moreover, the prior year included $10 million of litigation and proxy contest costs. College EBITDA declined slightly from $95.3 million to $93.9 million. BN.com EBITDA losses increased from $50.2 million to $58.9 million, driven by planned product markdowns at the recently announced NOOK price adjustments, in addition higher advertising production costs.
Total company net loss was $6.6 million for the quarter, or $0.17 per share, compared to a net lack of $12.6 million last year, or $0.22 per share. Included within the current quarter is a $0.06 loss per share associated with the company’s preferred stock dividend, based on ASC 260, Earnings per Share. The dividend is deducted from earnings available to common shareholders within the earnings per share calculation and doesn’t impact the company’s result of operations.
BARNES & NOBLE LAUNCHES NOOK Tablet™
On November 7, 2011, Barnes & Noble launched NOOK Tablet, the company’s fastest and lightest tablet with the very best in entertainment. msnbc.com cited the product as a “terrific tablet,” The Associated Press called it “really impressive” and Forrester Research Inc. called it a “wow product”. Inside the first few weeks of launch, NOOK Tablet has become the fastest selling NOOK product within the company’s history.
Concurrent with the launch of NOOK Tablet, the corporate also announced enhancements and new low prices for NOOK Color™ and NOOK Simple Touch™, retailing at $199 and $99, respectively.
The newly updated NOOK Simple Touch continues to earn high praise from leading tech review outlets. CNET, PCMag and Laptop Magazine rank it among their top-rated touch eReaders with all three naming it “Editor’s Choice” and this week, PC World rated NOOK Simple Touch the #1 eReader (11/29/11).
The consolidated NOOK business across each of the company’s segments, including sales of digital content, device hardware and related accessories, increased 85% within the second quarter to $220 million, on a comparable sales basis.
“The launch of NOOK Tablet, combined with the product enhancements to NOOK Color and $99 NOOK Simple Touch, represents the best-quality portfolio of digital reading products available on the market at incredible values,” said William Lynch, chief executive officer of Barnes & Noble, Inc. “We predict to sell millions of devices during our third quarter, adding to the millions of current NOOK customers. This growing base of shoppers buying digital content from Barnes & Noble will continue to place us as among the fastest growing companies during this exploding digital content market, and we project this would generate significant returns on our investments for years yet to come.”
HOLIDAY RESULTS TO DATE
Over the 3-day holiday weekend, comparable store sales increased 10.9% at Barnes & Noble stores, on top of 17% comparable store growth last year. “In line with early sales and traffic leads to stores we’re encouraged by our prospects for this upcoming holiday,” added William Lynch.
FULL YEAR GUIDANCE
The corporate expects full year EBITDA to be on the lower end of the previously issued range of $210 million to $250 million. Although the corporate has seen and continues to expect increases in retail earnings from plan, it plans to speculate more heavily in customer acquisition activities to fuel NOOK digital growth. These investments primarily include promotional activity and advertising for NOOK products, in addition to technology costs involving developing other opportunities.
CONFERENCE CALL
A conference call with Barnes & Noble, Inc.’s senior management might be webcast beginning at 10:00 A.M. ET on Thursday, December 1, 2011, and is on the market at www.barnesandnobleinc.com/webcasts.
Barnes & Noble, Inc. will report holiday sales on or about January 5, 2012.
ABOUT BARNES & NOBLE, INC.
Barnes & Noble, Inc. (NYSE:BKS), the world’s largest bookseller and a Fortune 500 company, operates 703 bookstores in 50 states. Barnes & Noble College Booksellers, LLC, a completely-owned subsidiary of Barnes & Noble, also operates 637 college bookstores serving over 4.6 million students and school members at colleges and universities around the U.s.a.. Barnes & Noble conducts its online business through BN.com (www.bn.com), one of the vital Web’s largest e-commerce sites, which also features greater than two million titles in its NOOK Bookstore™ (www.bn.com/ebooks). Through Barnes & Noble’s NOOK™ eReading product offering, customers can purchase and skim digital books and content at the widest range of platforms, including NOOK devices, partner company products, and the most well liked mobile and computing devices using free NOOK software.
General information on Barnes & Noble, Inc. could be obtained via the web by visiting the company’s corporate website: www.barnesandnobleinc.com.
NOOK®, NOOK Tablet™, NOOK Simple Touch ™, NOOK 1st Edition™, NOOK 1st Edition Wi-Fi™, NOOK Color™, Reader’s Tablet™, PagePerfect™, Best-Text™, Fast Page™, NOOK Books™, NOOK Store™, NOOK Bookstore™, NOOK Newsstand™, NOOK Magazines™, VividView™, ArticleView™, NOOK Newspapers™, NOOK Comics™, NOOK Cloud™, NOOK Apps™, FREE NOOK Reading Apps™, PubIt!™, NOOK Discover™, NOOK Kids™, Read and Play™, Read to Me™, Read and Record™, NOOK Digital Shop™, Read In Store™, More In Store™, NOOK Friends™, LendMe®, NOOK Library™, NOOK Boutiques™, The Barnes & Noble Promise™, NOOK Books en español™, NOOK Study™, Free Friday™, Lifetime Library™ and browse What You’re keen on. Anywhere You prefer™ are trademarks of Barnes & Noble, Inc. Other trademarks referenced on this release are the valuables in their respective owners.
Follow Barnes & Noble on Twitter (www.bn.com/twitter), Facebook (http://www.facebook.com/barnesandnoble) and YouTube (http://www.youtube.com/user/bnstudio).
FORWARD-LOOKING STATEMENTS
This press release contains certain forward-looking statements (in the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) and knowledge regarding Barnes & Noble which can be according to the beliefs of the management of Barnes & Noble in addition to assumptions made by and knowledge currently available to the management of Barnes & Noble. When utilized in this communication, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “will” and similar expressions, as they relate to Barnes & Noble or the management of Barnes & Noble, identify forward-looking statements.
Such statements reflect the present views of Barnes & Noble with respect to future events, the result of that is subject to certain risks, including, among others, the final economic environment and consumer spending patterns, decreased consumer demand for Barnes & Noble’s products, low growth or declining sales and net income as a result of different factors, risk that international expansion is probably not successfully achieved or could be achieved later than expected, possible disruptions in Barnes & Noble’s computers, telephone systems or supply chain, possible risks linked to data privacy, information security and intellectual property, possible work stoppages or increases in labor costs, possible increases in shipping rates or interruptions in shipping service, effects of competition, the chance that the anticipated sales lift from Borders’ store closures isn’t achieved in whole or part, the chance that digital sales growth is lower than expectations and the chance that it doesn’t exceed the speed of investment spend, higher-than-anticipated store closing or relocation costs, higher rates of interest, the performance of Barnes & Noble’s online, digital and other initiatives, the performance and successful integration of acquired businesses, the success of Barnes & Noble’s strategic investments, unanticipated increases in merchandise, component or occupancy costs, unanticipated adverse litigation results or effects, product and component shortages, and other factors that could be outside of Barnes & Noble’s control, including those factors discussed intimately in Item 1A, “Risk Factors,” in Barnes & Noble’s Annual Report on Form 10-K and Form 10-K/A, and in Barnes & Noble’s other filings made hereafter occasionally with the SEC.
Should a number of of those risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those described as anticipated, believed, estimated, expected, intended or planned. Subsequent written and oral forward-looking statements caused by Barnes & Noble or persons performing on its behalf are expressly qualified of their entirety by the cautionary statements on this paragraph. Barnes & Noble undertakes no obligation to publicly update or revise any forward-looking statements, whether due to new information, future events or otherwise after the date of this communication.
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