New York, NY (August 23, 2007)—Barnes & Noble, Inc. (NYSE: BKS), the world’s largest bookseller, today reported sales and earnings for the second quarter ended August 4, 2007. In addition, the company also announced that its Board of Directors declared a quarterly cash dividend of $0.15 per share for stockholders of record at the close of business on September 7, 2007, payable on September 28, 2007.
Sales for the second quarter increased 7.6% to $1.2 billion. Barnes & Noble store sales increased 7.3% to $1.1 billion, with comparable store sales increasing 4.4% for the quarter. Barnes & Noble.com sales were $97.5 million for the quarter, a 17.9% comparable sales increase compared to the prior year period. Second quarter results were positively impacted by the phenomenal success of J.K. Rowling’s Harry Potter and the Deathly Hallows, of which the company sold 1.7 million copies in its stores and 0.4 million copies online through August 4, 2007. Excluding sales from this book, comparable sales increased 1.0% in stores and 7.3% online.
Bestselling titles during the quarter also included The Reagan Diaries, Al Gore’s The Assault on Reason, Conn and Hal Iggulden’s The Dangerous Book for Boys, Walter Isaacson’s Einstein, Khaled Hosseini’s A Thousand Splendid Suns and Janet Evanovich’s Lean Mean Thirteen.
Second quarter net earnings were $18.1 million or $0.26 per share. Second quarter results include an $8.0 million or $0.12 per share increase in net earnings resulting primarily from previously unrecognized tax benefits for which the statute of limitations expired in the second quarter. Second quarter results also include a $0.03 per share benefit for lower than forecasted distribution center closing costs. Excluding these items, net earnings were $0.12 per share, in-line with company guidance of $0.08 to $0.12 per share.
In the second quarter of 2007, the company acquired 0.5 million shares for $19.5 million under its share repurchase program. The company has acquired an additional 1.2 million shares for $39.8 million during the third quarter to date.
“Record breaking sales from J.K. Rowling’s Harry Potter and the Deathly Hallows was the principal driver behind our comparable store sales growth in the quarter,” said Steve Riggio, chief executive officer of Barnes & Noble, Inc. “The book continues to sell well, as do all the previous volumes in the Harry Potter series. The new release schedule for the third quarter includes a few books that should generate significant media attention, including President Clinton’s Giving, Alan Greenspan’s The Age of Turbulence and Eric Clapton’s The Autobiography. Based upon current trends, we remain comfortable with our full year sales forecast.”
For the third quarter, the company expects comparable store sales at Barnes & Noble stores to range from flat to an increase in the low-single digits. The company continues to expect full year comparable store sales to range from flat to slightly positive.
Barnes & Noble, Inc.’s third quarter loss per share is expected to be in a range of $0.06 to $0.10. The company is increasing its full-year earnings per share guidance to reflect the previously mentioned second quarter benefits from income taxes ($0.12 per share) and distribution center closing costs ($0.03 per share), as well as a $0.05 per share benefit resulting from a reduced fully diluted share count. The company now expects full-year GAAP earnings per share to be in a range of $1.69 to $1.87, compared to previous guidance of $1.49 to $1.67.
As of August 4, 2007, the company operated 698 Barnes & Noble stores and 94 B. Dalton stores. During the second quarter, four Barnes & Noble stores were opened and two were closed. Three B. Dalton stores were closed during the quarter.
A conference call with Barnes & Noble, Inc.’s senior management will be webcast beginning at 10:00 A.M. ET on Thursday, August 23, 2007, and is accessible at www.barnesandnobleinc.com/webcasts. The call will also be archived at www.earnings.com for one year.
Barnes & Noble, Inc. will report third quarter earnings on or about November 20, 2007.
Here you can download financial tables related to the sales and earnings for the second quarter ended August 4, 2007.
Consolidated Statements of Operations (13 KB)
Consolidated Balance Sheets (14 KB)
To read the tables, you will need Adobe Reader, available at no charge from Adobe. Click here to download Adobe Reader and follow the step-by-step instructions.