The Nook division, on the other hand, now that's the fun part of the news today. B&N reported that the Nook segment earned revenues of $192 million for the quarter, which is up about 3 tenths of a percent. That's as near as flat as to be no increase at all. But the story gets worse.
Barnes & Noble also states that digital sales (ebooks and apps) were up 46%, while device sales were down significantly due to decreased demand and production issues for the Nook Glow. You have to wonder exactly how much B&N is losing on the Nook hardware, don't you?
BTW, there's an interesting discrepancy in the press release. Today B&N is claiming that the Nook division earned $191 million in the first fiscal quarter of last year, while last year they reported earning $277 million during that same period. That's a difference of some $86 million, which is no chump change.
Okay, this could just be an accounting difference, but the description in the press release is the same. Both figures cover "sales of digital content, device hardware and related accessories". Do you suppose B&N is pulling a sleight of hand to hide how bad things really are?
Absent an explanation from B&N, I cannot tell. But if we look at the rest of B&N's bad news today, I'd say there's a better than even chance.
Update: Here's B&N's explanation:
The $277 million we reported last year was for the consolidated NOOK business across all of the company’s segments, on a comparable sales basis. The $191 million of NOOK segment revenues we reported for Q1 this year was on a GAAP basis, not a comparable sales basis. Comparable sales reflect the actual selling price for eBooks sold under the agency model rather than solely the commission received.
Let's hope B&N's plan to sell the Nook to 10 more countries bears fruit, because they're not getting the same growth in digital that they got last year. This time last year B&N was reporting a quadrupling of digital sales, and that makes today's new look like the growth in their digital sales are starting to level off. The UK Nook store is expected to launch in October, and adding 60 million consumers should ameliorate the plateau.
P.S. And in other news, B&N also mentioned that they're still working to spin off Newco, the new subsidiary which they and MS launched earlier this year. That process should be complete this fall.