Earnings at Barnes & Noble increased 14% year-on-year to $197m (£131m) in the quarter to 31st January, though sales of NOOK devices and related products were down more than 50%.
B&N c.e.o. Michael P Huseby said the company was “pleased with the performance of our businesses” and the Wall Street Journal reported that the positive results meant the number of stores forecast to be cut in the year to 2nd May will be reduced from 20 to 13.
In results released for its third fiscal quarter, the company said revenues through its bookstores and website were down 1% to $1.4bn. The company attributed this primarily to “lower sales of NOOK products, leading to a comparable store sales decline of 0.3% for the quarter, as well as store closures”. Retail core sales, those excluding NOOK products, “increased 1.7% for the quarter on higher sales of both book and non-book core categories”. Huseby put this down to the “continued stabilisation of the physical book business, as well as continued growth in non-book core categories”.
The retail sector generated profits of $199m in the quarter, “essentially flat as compared to a year ago”.
The NOOK segment of the business had revenues of $78m for the quarter, decreasing 50.6% from a year ago. Device and accessories sales were $37m for the three months, a decrease of 62.8% from a year ago, “due to lower unit selling volume”. Digital content sales were $41m, a decrease of 29.3% compared to a year ago, “due primarily to the lower device unit sales volume”.
But Barnes & Noble said that NOOK’s EBITDA losses decreased $32m, or 52.5%, and “margins improved on product mix and lower occupancy costs, while expenses declined on continued cost rationalisation efforts”.
Barnes & Noble’s College segment, which it will spin off into a separate business, increased its revenues by 7.2% to $521m compared to a year ago. The increase was put down to new store growth, as well as a change in the fiscal calendar, which meant Barnes & Noble could include an extra week of spring back-to-school sales in its results. Huseby said the College sector’s “top line sales grew through new school acquisitions and better than expected comparable sales trends”.
For the comparable sales period, comparable College store sales decreased 1.4% for the quarter.
Huseby said: “This performance across all businesses further supports our belief that now is the right time to separate the College business. The separation will allow each business to optimise their strategic opportunities, given their respective growth profiles, and specifically enable College to pursue opportunities in the growing educational services market.”