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B&N Reports Store Sales Down, Digital Sales Up Last Quarter

Barnes & Noble posted their quarterly earning report this morning, and there’s both good news and bad news. Total sales dropped slightly, from $1.9 billion to $1.89 billion, compared to last year. B&N posted a net loss of $6.6 million for the quarter, a slight improvement over the loss of $12.6 million last year. Unfortunately, this is below Wall Street expectations.

Sales in B&N’s bricks-and-mortar stores fell 1% last quarter, to $918 million, and sales at established stores dropped just over half a percent. The company noted that "physical book sales declined, offset by increases in Nook products and were positively affected by the liquidation of the remaining Borders stores."

Barnes & Noble’s digital division, B&, saw sales jump 17%, to $206 million. This is largely attributed to an increase in sales of Nook ereaders and ebooks. Sales also decreased by 4% at B&N College, to $768 million, mainly because of the stores have shifted from selling new and used textbooks to textbook rentals. The latter have a lower price but a higher profit margin.

So it looks like B&N is doing better than last year, but they’re still losing money. Lucky for them they have that $204 million capital investment from Liberty Media. That should be enough to cover them for the next couple years, or until they turn profitable again.

I’m looking forward to the report for this quarter. B&n launched the Nook Tablet and dropped the price of the Nook Touch and Nook Color. That should provide another boost in sales.


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Doug December 1, 2011 um 11:35 am

I don’t know how large of sales can handle. sales up 17%, EBITDA losses up 17%. This has been a long-standing pattern at the more they sell, the more money they lose. B&N overall came darned close to breaking even for the quarter (less than $6 in losses), and would have had a nice profit except for’s losses.

Last quarter B&N CEO William Lynch said that "in fiscal 2012, … our digital sales growth is projected to exceed the growth of investment spend.?" This
quarter, perhaps fueled by the Liberty Media investment, B&N is singing a different tune, saying that it "plans to invest more heavily in customer acquisition activities to fuel NOOK digital growth. These investments primarily include promotional activity and advertising for NOOK products, as well as technology costs related to developing other opportunities."

Doug December 1, 2011 um 11:37 am

Obviously, the "less than $6 in losses" is incorrect. It’s "less than $7 million in losses." I’m blaming that mistake on old age.

Quincy December 1, 2011 um 6:32 pm

They are spending money to move internationally (my guess is UK and partnering with Waterstone) and to develop a better platform to sell to college students. As well the Nook Tablet has been selling so well they decided to extend and increase the advertising spend to keep the momentum up as they are gaining share this hioliday season.

Quincy December 1, 2011 um 6:33 pm

this is why the spend won’t be leveraged

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