B&N Reports: Sales Drop, Earnings Dip But Still Strong
Sales at Barnes & Noble in the fourth quarter ended January 31 fell 4.8% to $1.4 billion and sales for the full year fell 2.7% to $4.5 billion. Sales at stores open at least a year fell 7.3% in the fourth quarter and 5.4% for the year. Sales at Barnes&Noble.com in the quarter fell 10.4% to $157 million and fell 1.3% to $466 million for the year.
Net earnings were $81.2 million in the fourth quarter and $75.9 million for the full year. Excluding several special charges--$2.5 million for severance for eliminated corporate positions and $9.7 million for selling its majority interest in Calendar Club--net earnings were $93.3 million in the fourth quarter and $88.1 million for the full year. Net earnings were higher in the comparable periods a year ago. In the fourth quarter of last year, net earnings were $115 million and for the year $135.8 million.
B&N expects comp-store sales in the first quarter to fall in a range of 6%-9% and for the year to fall 4%-6%.
In a statement, B&N CEO Steve Riggio said, "While 2008 proved to be the most challenging year that the company and the industry have ever experienced, we are proud of our financial results in light of the macro retail environment. Despite a sales decrease of 3%, gross margins improved by 50 basis points [0.5%], inventory levels were reduced by 11%, and our focus on expense control and capital expenditures enabled us to generate operating free cash flow of $150 million, exceeding our expectations. As we look to 2009, we expect the challenging environment to continue. Sales forecasts have been planned accordingly and expenses have been cut. The strength of our balance sheet remains a top priority. And, while we are reducing overall expense levels where appropriate, we will continue to invest in the growth areas of the business, as evidenced in our recent acquisition of Fictionwise."