B&N reports low 3rd quarter results

B&N reports low 3rd quarter results

Nov 20 2008

Barnes & Noble reported sales of $1.1 billion for their third quarter, and a net loss of $18.4 million. The results are below the company's previous guidance and analysts' diminished expectations--the operating loss of .21 a share compares to analysts' prediction of .16 share.

CEO Steve Riggio says "a significant drop off in customer traffic and consumer spending impacted our business." But he adds, "On a positive note, our gross margins continue to hold up well. We have scrupulously avoided driving unprofitable top line sales growth with additional coupon promotions and extra discounting. Additionally, the company remains focused on producing cash flow. We are managing our working capital efficiently, which is evident in the reduction of $107 million of inventory compared to last year." They will maintain their dividend of .25 a share.

Having cut planned new stores for 2009 early to a target of 20 to 25 stores, they are "now reducing that number to approximately 15 new stores," of which nine are relocations and upgrades.

Riggio said they were experiencing the "same type of decline reported by other major retailers" and cited in particular the "lack of coverage of books, both in the mainstream media and on talk-radio," due to the presidential election and the economic crisis. Riggio told analysts not to expect extra discounts this holiday to drive sales. "We don't believe that more aggressive discounting is profitable. We can drive traffic, but we don't think we can drive traffic profitably" that way.

More News Stories