New York, NY (November 20, 2007)—Barnes & Noble, Inc. (NYSE: BKS), the world’s largest bookseller, today reported sales and earnings for the third quarter ended November 3, 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 December 7, 2007, payable on December 28, 2007.
Sales for the third quarter increased 5.7% to $1.2 billion. Barnes & Noble store sales increased 4.5% to $1.0 billion, with comparable store sales increasing 2.6% for the quarter, at the high end of guidance for a flat to low-single digit increase. Barnes & Noble.com sales were $108.2 million for the quarter, a 14.5% comparable sales increase compared to the prior year period.
Bestselling titles during the quarter included Alan Greenspan’s The Age of Turbulence, John Grisham’s Playing for Pizza, Ken Follett’s World Without End, Nicholas Sparks’ The Choice and Stephen Colbert’s I Am America (and So Can You!).
Third quarter net earnings were $4.4 million or $0.07 per share. Included in third quarter net earnings was an after tax benefit of $6.2 million, or $0.09 per share, resulting from a more favorable physical inventory shortage rate than previously estimated and accrued. Excluding this benefit, third quarter net loss per share was $1.8 million, or $0.03 per share, better than guidance of a loss of $0.06 to $0.10 per share.
“The company’s sales continued to perform at the higher end of expectations, due in part to strong sales of new releases and bestsellers, which combined with a better than expected gross margin rate enabled the company to outperform its third quarter earnings expectations,” said Steve Riggio, chief executive officer of Barnes & Noble, Inc. “In addition, we are encouraged by the sales trends at Barnes & Noble.com that began earlier this year and continued through the third quarter, in which we launched a newly designed website.”
In the third quarter of 2007, the company acquired 4.9 million shares for $172.5 million under its share repurchase program. Year-to-date, the company acquired 6.0 million shares for $219.9 million under its share repurchase program. The company has $232.4 million remaining under its existing share repurchase authorization.
GUIDANCE
For the fourth quarter and full year, the company expects comparable store sales at Barnes & Noble stores to increase in the low-single digits. The company previously expected full year comparable store sales to range from flat to slightly positive.
Barnes & Noble, Inc.’s fourth quarter earnings per share is expected to be in a range of $1.67 to $1.86. The company is increasing its full-year earnings per share guidance to reflect the third quarter outperformance ($0.14 per share), the benefit resulting from a reduced fully diluted share count ($0.04 per share), as well as improved net earnings on higher projected fourth quarter sales ($0.04 per share). The company now expects full-year GAAP earnings per share to be in a range of $1.91 to $2.09, compared to previous guidance of $1.69 to $1.87.
As of November 3, 2007, the company operated 709 Barnes & Noble stores and 92 B. Dalton stores. During the third quarter, 14 Barnes & Noble stores were opened and three were closed.
A conference call with Barnes & Noble, Inc.’s senior management will be webcast beginning at 10:00 A.M. ET on Tuesday, November 20, 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 holiday sales results on or about January 10, 2008.
FINANCIAL TABLES
Download financial tables related to the sales and earnings for the third quarter ended November 3, 2007:
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