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New York, NY (May 22, 2003)—Barnes & Noble, Inc. (NYSE: BKS) , the world’s largest bookseller, today reported financial results for the first quarter ended May 3, 2003.
FIRST QUARTER RESULTS
Barnes & Noble Booksellers
For the first quarter, sales were $863.9 million and net loss was $(3.2) million or $(0.05) per share.
- Barnes & Noble store sales were $803.5 million for the quarter. Comparable store sales decreased (1.8)% for the month of April and (5.2)% for the first quarter. The company opened four new Barnes & Noble stores and closed two locations ending the quarter with 630 stores.
- B. Dalton sales, which comprise approximately 5.0% of total bookstore sales, were $45.9 million for the quarter, a decrease of (24.1)%. Comparable store sales decreased (11.7)% for the month of April and (14.0)% for the first quarter. The company closed 13 B. Dalton stores.
The results include the effect of the newly adopted Emerging Issues Task Force Issue No. 02-16 (EITF 02-16), which addresses the accounting for cooperative advertising and other vendor incentive programs. The impact of EITF 02-16 was less than $(0.01) per share for the first quarter and is expected to be approximately $(0.02) per share for the full year.
"An improvement in April sales enabled us to outperform our revised guidance, in spite of the difficulties all retailers experienced in the first quarter," said Steve Riggio, chief executive officer of Barnes & Noble, Inc. "However, we remain cautious about sales trends for the balance of the year due to the current uncertain retail climate."
GameStop
GameStop, the nation’s largest video game and entertainment software specialty retailer, reported a comparable store sales increase of 3.5% during the quarter, on top of a 28.7% comparable store sales increase during the first quarter of fiscal 2002. GameStop sales were $321.7 million for the quarter, an increase of 18.5%. The company’s share of net earnings for the first quarter (based upon Barnes & Noble, Inc.’s basic ownership interest of approximately 63%) was $4.2 million or $0.06 per share.
Barnes & Noble.com
Barnes & Noble.com reported a first quarter EBITDA loss (loss before interest, taxes, depreciation, amortization and equity losses) of $(5.9) million, a 52.8% improvement from the first quarter 2002 EBITDA loss. Total operating expenses decreased 11.4% quarter-over-quarter, as Barnes & Noble.com continues to reduce and leverage its operating expense base.
The company’s share of net losses for Barnes & Noble.com was $(3.0) million or $(0.04) per share for the quarter.
Consolidated
Consolidated net loss for the first quarter was $(2.0) million or $(0.03) per share compared with $(1.4) million or $(0.02) per share, prior to a non-cash impairment charge of $(0.23) per share, in the previous year.
GUIDANCE FOR THE SECOND QUARTER
Barnes & Noble Booksellers
The company expects comparable store sales at Barnes & Noble stores to range from flat to 2.0%. Based upon these projections, the company expects earnings to range between $0.10 and $0.14 per share for the second quarter of 2003, versus an equivalent $0.16 for the same period last year.
GameStop
The company’s share of net earnings in GameStop is expected to range from $0.05 to $0.06 per share.
Barnes & Noble.com
The company’s share of second quarter net losses in Barnes & Noble.com is expected to be in the range of $(0.05) to $(0.06) per share.
Consolidated
Consolidated results for the second quarter are expected to range from $0.09 to $0.15 per share, based upon a share count of approximately 67 million shares. Full year guidance remains unchanged, in a range of $1.87 to $1.95 per share.
A conference call with Barnes & Noble, Inc.’s management will be simulcast on the Web at (www.companyboardroom.com) beginning at 11 A.M. ET on Thursday, May 22, 2003, and is accessible at (http://www.barnesandnobleinc.com/financials), where it will be archived until June 20, 2003.
The next scheduled press release will be the May sales release on June 5, 2003.
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