B&N Reports Profits Up as Nook Revenues Continue a Death Spiral
Barnes & Noble had mixed news in its third quarter FY2015 report today. Overall revenues decreased, largely due to retail and Nook revenues, while sales at B&N’s college store operations increased.
B&N reported that its combined revenue fell 1.7%, to $1.97 billion. Net income rose to $72.1 million, while EBITDA also increased 14%, to $197.4 million.
- The Retail segment, which includes the Barnes & Noble bookstores and BN.com, had revenues of $1.4 billion for the quarter, decreasing 1.0% as compared to the prior year.
- The College segment had revenues of $521 million, increasing 7.2% as compared to a year ago. In addition to new store growth, third quarter sales benefitted from a later shift in the fiscal calendar. The quarter ended on January 31st this year, as compared to January 25th last year, and, therefore, included an additional week of the spring back-to-school rush season.
- The NOOK segment (including digital content, devices and accessories) had revenues of $78 million for the quarter, decreasing 50.6% from a year ago. Device and accessories sales were $37 million for the quarter, a decrease of 62.8% from a year ago, due to lower unit selling volume. Digital content sales were $41 million for the quarter, a decline of 29.3% compared to a year ago, due primarily to the lower device unit sales volume.
There’s little good news here other than the fact that B&N’s cost-cutting measures are improving its profitability (whether that will lead to long term gain is another matter). Even in the college stores, revenues were up largely due to an extra week in the quarter, leading to more back to school sales being counted in the 3rd quarter and not the 4th. And in related news, PW also reports that B&N is only going to close 13 stores this year, down from the expected twenty.
And then there’s the Nook, which continues to lower the bar required to claim the title of second biggest ebookstore in the world.
Now any ebookstore which earns more than $41 million in sales in that quarter can say it’s bigger than the Nook Store.
So far no one has stepped up and claimed the title; do you suppose that means that iBooks, Google Play, and Kobo aren’t selling enough to meet the threshold?