New York, NY (June 28, 2010)—Barnes & Noble, Inc. (NYSE: BKS), the world’s largest bookseller, today reported sales and earnings for its fiscal 2010 fourth quarter and full year ended May 1, 2010.
FOURTH QUARTER RESULTS
Total sales for the fourth quarter were $1.3 billion, a 19% increase from the thirteen weeks ended May 2, 2009. Barnes & Noble.com sales increased 51% to $141 million for the quarter, as compared to the period one year ago. Barnes & Noble store sales decreased 3% to $962 million, with comparable store sales decreasing 3.1% for the quarter, in-line with guidance of a comparable store sales decline between 2% and 4%. In 2010, total sales include Barnes & Noble College Booksellers (“College”) sales of $205 million. College’s comparable store sales increased 2.9%, exceeding guidance of a decline of 1% to an increase of 1%.
For the fourth quarter, the company reported a consolidated net loss of $32 million, or $0.58 per share. Included in these results is a benefit of $0.25 per share resulting from the release of tax reserves pursuant to the completion of tax examinations. The results also include an after-tax benefit of $0.07 per share, resulting from a more favorable physical inventory shortage rate than previously forecasted. Excluding both of these benefits, the fourth quarter net loss was $0.89 per share. This loss was in-line with previously issued guidance of $0.85 to $1.15 per share.
FISCAL 2010 FULL-YEAR RESULTS
Total sales for the full year were $5.8 billion. Barnes & Noble.com sales increased 24% to $573 million for the year, as compared to the twelve month period ended May 2, 2009. Barnes & Noble store sales were $4.3 billion, with comparable store sales decreasing 4.8% for the year. Total fiscal year 2010 sales include post-acquisition College sales of $836 million, with comparable store sales decreasing 0.3% during that same period.
Consolidated net earnings were $36.7 million, or $0.63 per share. Excluding the tax benefits noted above, consolidated net earnings would have been $0.39 per share, as compared to guidance of $0.23 to $0.53 per share.
In fiscal 2011, Barnes & Noble expects its consolidated sales to increase 20% to 25%. Barnes & Noble.com comparable sales are expected to increase by approximately 75% to $1 billion. (Barnes & Noble.com comparable sales reflects the actual retail selling price for eBooks sold under the agency model rather than solely the commission received.) Barnes & Noble comparable store sales are expected to be in a range of flat to an increase of 3%. College comparable store sales are expected to be flat.
“We are pleased that in the fourth quarter each of our three channels of business have all gained significant share: physical bookstores, digital books and books sold online at bn.com. In fact, in just a brief 12 months since we launched the Barnes and Noble ebookstore, our share of the digital market already exceeds our share of the retail book market,” said William Lynch, chief executive officer of Barnes & Noble, Inc. “In light of the exciting digital opportunity before us, we are planning to redirect a significant portion of our financial resources towards investments in technology, sales and marketing. These investments will impact our bottom line in 2011, but we believe they will enable Barnes & Noble to capitalize on the significant mid-to-long-term growth opportunities presented by the digital markets.”
As a result of the planned increases in investment spending in the business, the company expects EBITDA to be in a range of $235 million to $275 million and earnings per share to be in a range of breakeven to a loss of $0.40 for fiscal 2011. In accordance with ASC 605-25 Revenue Recognition, Multiple Element Arrangements, the company is deferring certain eReader device revenue over a two year period. Excluding this deferral, fiscal 2011 net earnings (losses) per share are expected to be in a range of ($0.10) to $0.30.
“The explosive growth of digital books has created the most compelling opportunity in Barnes & Noble’s history,” said Leonard Riggio, chairman of Barnes & Noble, Inc. “We have found that Barnes & Noble Members, our best customers, have increased their combined physical and digital spend with us by 17 percent since purchasing a NOOK™, and by a phenomenal 70 percent in total units. Based on our assessment of the future digital landscape, I am confident that we have the right strategy and management team to drive Barnes & Noble’s next phase of growth and development.”
For the company’s fiscal 2011 first quarter ending July 31, 2010, Barnes & Noble.com comparable sales are expected to increase 30% to 50%. Barnes & Noble comparable store sales are expected to be in a range of flat to an increase of 3%. College comparable store sales are expected to be flat. First quarter net loss per share is expected to be in a range of $0.85 to $1.15.
INVESTOR DAY WEBCAST
The company’s senior management will host an investor conference beginning at 9:00 AM ET on Tuesday, June 29, to discuss the company's financial results, business strategy and longer-term outlook. The webcast of this investor conference can be accessed on Barnes & Noble, Inc.'s corporate website at www.barnesandnobleinc.com/webcasts. The webcast will be archived and available for one year at www.earnings.com.
Barnes & Noble, Inc. will report fiscal 2011 first quarter results on or about August 24, 2010.
Download financial tables related to the sales and earnings for the fourth quarter and full year ended May 1, 2010:
Consolidated Statements of Operations (13 KB)
Consolidated Balance Sheets (13 KB)
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