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Barnes & Noble predicts £1.1bn sales from Nook businesses
01.01.70 | Katie Allen
Barnes & Noble has said it expects its Nook e-book business to earn it $1.8bn (£1.1bn) by the end of its latest financial year.
It made the prediction in its first quarter results for the 13 weeks ending 30th July 2011, which showed the business improved on its losses, but still lost $56.6m (£34.8m). If the predictions pan out, the Nook business, which includes sales of the e-book reader, digital content and related accessories, will be worth almost a quarter of B&N's predicted sales for 2012 of $7.4bn (£4.5bn). The retailer said the Nook earned $880m (£540.8m) in its 2011 financial year and $123m (£75.6m) in the 2010 financial year.
In its first quarter, total sales were $1.4bn (£860.7m), up 2% on 2010. B&N cut its consolidated net loss from $62.5m (£38.4m) to $56.6m (£34.8m) in its first quarter last year.
Sales through the retailer's website were up 37% to $198m (£121.8m), and up 65% on a like for like basis. It said this was largely driven by the Nook Colour, the launch of the Nook Simple Touch Reader and a quadrupling in digital content sales from the same quarter in 2010.
Store sales were down 3% to $1bn (£614.8m) and down 1.6% on a like for like basis. Barnes & Noble said physical book sales were down but toys and games, as well as Nook products were up. Sales in its college business decreased 2% to $220m (£135.3m) and 1.8% on a like for like basis. Overall, the Nook and its related businesses had sales of $277m (£170.4m) during the first quarter, up 140% on a like for like business.
Barnes & Noble c.e.o. William Lynch said: "Our strategy of growing market share in the exploding digital content business while maximizing cash flow and [earnings before interest, depreciation and amortisation] from our retail operations is paying off.
"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.”