Barnes & Noble just released their financial report for the first full quarter following the wholesale sacking of its more experienced (and expensive employees), and the news is not good.
According to the SEC filing and the press release, the company’s revenues fell almost seven percent last quarter, to $795 million. (Nook revenues fell 8.6%, to $25.3 million.)
I will listen to the investor conference call (well, I’ll wait for the transcript and read it) and update this post with additional details, but at this point it looks like the company continues to be FUBAR.
Edit: Seeking Alpha has the investor phone call. What little good news there was included: The rate of decline in sales slowed: Comparable store sales sequentially improved each month throughout the quarter declining 7.8% in May, 6.1% in June and 4.5% in July.
That was really the only part that could be described as good news; much of the rest of the call was taken up with details like B&N’s 5 restaurants are a bust, and how B&N had lots of plans on what to sell to people in the coming quarters.
As we looked at fall, we expect our business to benefit from a more robust publishing calendar than we had last year. There are big releases to support growing genres like personal growth, current affairs, history and religion. For political junkies, it seems like there’s a new book every week this fall including fear, Trump in the White House by Bob Woodward that is getting so much media attention this week.
Nick Sparks, Joni Mitchell and Mitch Albom who don’t publish every year will be on shelves by October. Other big titles include Michelle Obama’s Becoming a memoir by the former First Lady. John Grissom’s The Reckoning, which is his fortieth title and will sure delight his fans and be one of the season’s largest fiction books. Fire & Blood which will give George R.R. Martin fans a new appreciation for the dynamic and fascinating history of Westeros.
There was also a mention of Parneros’s lawsuit, but no new details were released.
B&N today reported sales and earnings for its fiscal 2019 first quarter ended July 28, 2018.
Total sales for the first quarter were $795 million, declining 6.9% as compared to the prior year, with comparable store sales declining 6.1%. Comparable store sales improved each month of the quarter, declining 7.8%, 6.1% and 4.5%. The sales trend continued to improve into the second quarter, declining 0.8% in August.
“We fully realize that cutting expenses does not alone provide a path to the long term viability of any retail business. Therefore, our short and long term focus is to grow our top line, and, by doing so, provide us the cash flow needed to grow our business,” said Len Riggio, Chairman of Barnes & Noble, Inc. “Comparable store sales have sequentially improved each month and continued into the second quarter. Thanks are due to our team of merchants and the entire store management group from top to bottom.”
The consolidated first quarter net loss was $17.0 million, or $0.23 per share, as compared to a loss of $10.8 million, or $0.15 per share, in the prior year.
The consolidated first quarter operating loss was $16.2 million, slightly higher than the prior year operating loss of $15.2 million, as the sales decline was partially mitigated by $22 million in expense reductions. Consolidated first quarter EBITDA was $7.7 million, as compared to $11.2 million a year ago.
As the Company prepares for the holiday season, it is encouraged by the sequential improvement in its sales trend and the fall title line-up. The organization is focused on its merchandising initiatives to grow sales, while continuing to control expenses.
For fiscal 2019, the Company continues to expect EBITDA to be in a range of $175 million to $200 million.
A conference call with Barnes & Noble, Inc.’s senior management will be webcast beginning at 10:00 A.M. ET on Thursday, September 6, 2018, and is accessible at investors.barnesandnobleinc.com.
Barnes & Noble, Inc. will report fiscal 2019 second quarter results on or about November 20, 2018.