Barnes & Noble, Inc. (NYSE: BKS), the world’s largest
bookseller, today reported sales and earnings for its fiscal 2012 first
quarter ended July 30, 2011.
FIRST QUARTER RESULTS
Total sales for the first quarter were $1.4 billion, a 2% increase
compared to the prior year. Sales through BN.com increased 37% as
compared to the prior year to $198 million, with comparable sales
increasing 65%. This increase was driven by strong demand for the NOOK
product line, including the continued success of the Award Winning NOOK
Color, the mid-quarter launch of the NOOK Simple Touch Reader and a
quadrupling of digital content sales over last year’s first quarter.
Barnes & Noble store sales decreased 3% to $1 billion, with comparable
store sales decreasing 1.6% for the quarter. While traditional physical
book sales declined during the quarter, the stores posted large
increases in sales of the NOOK product line and Toys & Games. In a
non-back-to-school period, Barnes & Noble College Bookstore (“College”)
sales declined 2% to $220 million, with comparable store sales
The consolidated NOOK business across all of the company’s segments,
including sales of digital content, device hardware and related
accessories, increased 140% in the first quarter to $277 million, on a
comparable sales basis.
The company’s earnings before interest, taxes, depreciation and
amortization (EBITDA) improved 23% this quarter from a loss of $30.7
million to $23.6 million. For the first quarter, the company reported a
consolidated net loss of $57 million, or $0.99 per share. The company’s
effective tax rate is 36.2%, lower than its previous rate of 39.7%. The
change in the effective tax rate had a $0.05 per share impact on the
quarter. Excluding the impact of the tax rate change, the company’s net
loss per share was $0.94.
“Our strategy of growing market share in the exploding digital content
business while maximizing cash flow and EBITDA from our retail
operations is paying off,” said William Lynch, chief executive officer.
“We plan to continue investing in the significant growth areas of our
business, and in fiscal 2012, we expect to see leverage as our digital
sales growth is projected to exceed the growth of investment spend.
Additionally, the return on investment is expected to increase in future
years, as readers purchase increasing amounts of digital content on the
platform we have built.”
“Our NOOK eReaders and applications continue to be cited as the finest
digital reading products on the market, with the new NOOK Simple Touch
Reader recently rated as the best eReader,” Mr. Lynch added. “The
company is encouraged by the progress achieved against our strategy and
believes in our plan to continue to appropriately invest in the massive
digital opportunity, while delivering strong EBITDA growth this year.”
For the full fiscal year 2012 consolidated sales are forecasted to be
$7.4 billion. Comparable sales at BN.com are expected to increase 60% to
70%. Barnes & Noble comparable store sales are expected to increase 2%
to 3% and College’s comparable store sales are expected to be flat. The
company expects a $150 million to $200 million sales lift in this fiscal
year following the complete liquidation of Borders stores. The
consolidated NOOK business across all of the company’s segments,
including sales of digital content, device hardware and related
accessories, is expected to double this year to $1.8 billion from $880
million last year and $123 million in fiscal 2010, on a comparable sales
The company expects full year earnings before interest, taxes,
depreciation and amortization (EBITDA) to be in a range of $210 million
to $250 million, representing a 30% to 50% increase as compared to the
prior year. This year’s EBITDA forecast includes transaction, advisory
and legal costs of approximately $15 million related to the strategic
alternatives process and the recently completed $204 million investment
made by Liberty Media in the company. The company expects full year
losses per share to be in a range of $0.10 to $0.50.
A conference call with Barnes & Noble, Inc.’s senior management will be
webcast beginning at 10:00 A.M. ET on Tuesday, August 30, 2011, and is
accessible at www.barnesandnobleinc.com/webcasts.
Barnes & Noble, Inc. will report fiscal 2012 second quarter earnings
results on or about November 22, 2011.
ABOUT BARNES & NOBLE, INC.
Barnes & Noble, Inc. (NYSE:BKS), the world's largest bookseller and a
Fortune 500 company, operates 704 bookstores in 50 states. Barnes &
Noble College Booksellers, LLC, a wholly-owned subsidiary of Barnes &
Noble, also operates 635 college bookstores serving over 4.6 million
students and faculty members at colleges and universities across the
United States. Barnes & Noble conducts its online business through
one of the Web's largest e-commerce sites, which also features more than
two million titles in its NOOK Bookstore(TM) (www.bn.com/ebooks).
Through Barnes & Noble’s NOOK(TM) eReading product offering, customers
can buy and read eBooks on the widest range of platforms, including NOOK
eBook Readers, devices from partner companies, and hundreds of the most
popular mobile and computing devices using free NOOK software.
General information on Barnes & Noble, Inc. can be obtained via the
Internet by visiting the company's corporate website: www.barnesandnobleinc.com.
The All-New NOOK(TM), The Simple Touch Reader(TM), NOOK(TM), NOOK 1st
Edition(TM), NOOK Wi-Fi 1st Edition(TM), NOOK Color(TM), Reader’s
Tablet(TM), Fast Page(TM), NOOK Books(TM), NOOK Bookstore(TM), NOOK
Newsstand(TM), PubIt!(TM), NOOK Kids(TM), Read In Store(TM), More In
Store(TM), NOOK Friends(TM), LendMe(R), NOOK Library(TM), NOOK
Boutiques(TM), The Barnes & Noble Promise(TM), NOOK Books en
español(TM), NOOK Study(TM), Free Friday(TM), Lifetime Library(TM) and
Read What You Love. Anywhere You Like(TM) are trademarks of Barnes &
Noble, Inc. Other trademarks referenced in this release are the property
of their respective owners.
Follow Barnes & Noble on Twitter (www.bn.com/twitter),
and YouTube (www.youtube.com/user/bnstudio).
This press release contains certain forward-looking statements (within
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
information relating to Barnes & Noble that are based on the beliefs of
the management of Barnes & Noble as well as assumptions made by and
information currently available to the management of Barnes & Noble.
When used 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 current views of Barnes & Noble with respect
to future events, the outcome of which is subject to certain risks,
including, among others, the general economic environment and consumer
spending patterns, decreased consumer demand for Barnes & Noble's
products, low growth or declining sales and net income due to various
factors, possible disruptions in Barnes & Noble's computer systems,
telephone systems or supply chain, possible risks associated with 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,
potential effects of a bankruptcy filing by one of Barnes & Noble's
largest competitors and actions taken by that competitor during
bankruptcy, including store closures, sales of inventory at discounted
prices and elimination of liabilities, the risk that the expected $200
million sales lift from Borders’ store closures is not achieved in whole
or part, the risk that digital sales growth is less than expectations
and the risk that it does not exceed the rate of investment spend,
higher-than-anticipated store closing or relocation costs, higher
interest rates, 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, the risk that clearance under the
Hart-Scott-Rodino Act with respect to Liberty GIC, Inc.’s (Liberty), a
subsidiary of Liberty Media Corporation, investment in the Company may
not be received and the effects of the failure to receive such
clearance, and other factors which may be outside of Barnes & Noble's
control, including those factors discussed in detail 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 from time
to time with the SEC.
Should one or more of these 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 attributable to Barnes & Noble or
persons acting on its behalf are expressly qualified in their entirety
by the cautionary statements in this paragraph. Barnes & Noble
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise after the date of this communication.