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Media Contact:
Mary Ellen Keating
Senior Vice President,
Corporate Communications
Barnes & Noble, Inc.
(212) 633-3323
mkeating@bn.com

Investor Contact:
Andy Milevoj
Vice President,
Investor Relations
Barnes & Noble, Inc.
(212) 633-3489
amilevoj@bn.com

03/03/2016

Barnes & Noble Reports Fiscal 2016 Third Quarter Financial Results

Core Comparable Store Sales Increase 1.3%, Marking Second Consecutive Increase
 
NOOK® Losses Decrease 62%
 
Consolidated EBITDA Increases to $169 million

New York, NY (March 3, 2016)—Barnes & Noble, Inc. (NYSE: BKS) today reported sales and earnings for its fiscal 2016 third quarter ended January 30, 2016.
 
Sales for the third quarter were $1.4 billion, decreasing 1.8% as compared to a year ago.  Third quarter EBITDA was $169.0 million, increasing 1.6% as compared to EBITDA of $166.4 million a year ago.  Consolidated third quarter net earnings from continuing operations were $80.3 million or $1.04 per share, compared to net earnings from continuing operations of $39.0 million, or $0.45 per share, in the prior year.
 
“We are pleased with our bookstore sales performance and the reduction of NOOK losses during the fiscal third quarter,” said Ron Boire, Chief Executive Officer of Barnes & Noble, Inc.  “Our Retail Core comparable store sales exhibited year-on-year growth, increasing 1.3% on top of a 1.7% increase a year ago, led by the continued strength of adult coloring books, as well as our Toys & Games, Music and Gift businesses.  We are encouraged by the improved bookstore sales trends that are enabling us to close the least amount of stores since fiscal 2000 and are excited to introduce our new store concept later this year, with the opening of four new stores throughout fiscal 2017.  While we still have significant work to do to improve sales at BN.com, we are encouraged by the site’s improved performance during the quarter and are making investments to drive traffic and sales.  I am also pleased with the progress that has been made to reduce NOOK losses. We remain committed to providing a great digital reading experience to our customers, while exploring all opportunities to further reduce losses.  Moving forward, our top priorities are growing bookstore and online sales, reducing Retail and NOOK expenses and growing our Membership base.”
 
Retail
Retail sales, which include Barnes & Noble stores and BN.com, were $1.4 billion, decreasing 1.2% due to lower online sales and store closures.  Comparable store sales increased 0.2% for the quarter.  Excluding NOOK products, Core comparable store sales increased 1.3% for the quarter.
 
Retail EBITDA was $180.2 million, decreasing $15.2 million as compared to the prior year.  EBITDA declined primarily on the sales decline, increased advertising and a non-cash publishing contract impairment charge of $4 million, partially offset by prior year pension settlement charges.
 
NOOK
NOOK sales of $51.7 million decreased 33.3% due primarily to lower device and content sales.  NOOK EBITDA losses of $11.2 million declined $17.9 million versus the prior year as the company continues to focus on cost rationalization efforts.
 
Return of Capital
During the quarter, the company returned over $28 million in cash to its shareholders, including $16.5 million through share repurchases and $11.5 million in dividends.  The Company acquired approximately 1.8 million shares at an average price of $9.17 during the quarter under its share repurchase program.
 
Outlook
For fiscal year 2016, the company continues to expect comparable store sales to be approximately flat with the prior year. Excluding NOOK products, Core comparable store sales are expected to increase approximately 1%.  The company also expects full fiscal year EBITDA losses in the NOOK segment to decline versus the prior year.
 
Conference Call
A conference call with Barnes & Noble, Inc.’s senior management will be webcast beginning at 10:00 A.M. ET on Thursday, March 3, 2016, and is accessible at www.barnesandnobleinc.com/webcasts.
 
Barnes & Noble, Inc. will report fiscal 2016 year-end earnings on or about June 23, 2016.

Financial Tables
Download financial tables related to the sales and earnings for the fiscal 2016 third quarter ended January 30, 2016:



About Barnes & Noble, Inc.
Barnes & Noble, Inc. (NYSE: BKS) is a Fortune 500 company, the nation’s largest retail bookseller, and a leading retailer of content, digital media and educational products. The Company operates 640 Barnes & Noble bookstores in 50 states, and one of the Web’s premier e-commerce sites, BN.com (www.bn.com). The NOOK Digital business offers a lineup of popular NOOK (www.nook.com) tablets and eReaders and an expansive collection of digital reading and entertainment content through the NOOK Store®. The NOOK Store features more than 4 million digital books in the US plus periodicals, comics, apps, movies and TV shows, and offers the ability to enjoy content across a wide array of popular devices through Free NOOK Reading Apps™ available for Android™, iOS® and Windows®.
 
General information on Barnes & Noble, Inc. can be obtained by visiting the Company's corporate website at www.barnesandnobleinc.com.
 
Forward-Looking Statements
This press release contains certain forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) and information relating to Barnes & Noble that are based on the beliefs of the management of Barnes & Noble as well as assumptions made by and information currently available to the management of Barnes & Noble. When used in this communication, the words "anticipate," "believe," "estimate," "expect," "intend," "plan," "will,” “forecasts,” “projections,” and similar expressions, as they relate to Barnes & Noble or the management of Barnes & Noble, identify forward-looking statements.
 
Such statements reflect the current views of Barnes & Noble with respect to future events, the outcome of which is subject to certain risks, including, among others, the general economic environment and consumer spending patterns, decreased consumer demand for Barnes & Noble’s products, low growth or declining sales and net income due to various factors, including store closings, higher-than-anticipated or increasing costs, including with respect to store closings, relocation, occupancy (including in connection with lease renewals) and labor costs, the effects of competition, the risk of insufficient access to financing to implement future business initiatives, risks associated with data privacy and information security, risks associated with Barnes & Noble’s supply chain, including possible delays and disruptions and increases in shipping rates, various risks associated with the digital business, including the possible loss of customers, declines in digital content sales, risks and costs associated with ongoing efforts to rationalize the digital business and the digital business not being able to perform its obligations under the Samsung commercial agreement and the consequences thereof, the risk that financial and operational forecasts and projections are not achieved, the performance of Barnes & Noble’s initiatives including but not limited to its new store concept and e-commerce initiatives, unanticipated adverse litigation results or effects, potential infringement of Barnes & Noble’s intellectual property by third parties or by Barnes & Noble of the intellectual property of third parties, and other factors, including those factors discussed in detail in Item 1A, “Risk Factors,” in Barnes & Noble’s Annual Report on Form 10-K for the fiscal year ended May 2, 2015, and in Barnes & Noble’s other filings made hereafter from time to time with the SEC.
 
Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those described as anticipated, believed, estimated, expected, intended or planned. Subsequent written and oral forward-looking statements attributable to Barnes & Noble or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements in this paragraph. Barnes & Noble undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this communication.