Barnes & Noble Forecasts Strong Nook Growth
Barnes & Noble Inc. said on Tuesday that it had narrowed its net loss during its fiscal first quarter, which ended July 30, as sales of its Nook e-book reader and e-books helped offset lower physical book sales.
The largest U.S. bookstore chain forecast sales of its Nook e-reader and e-books would more than double this fiscal year to $1.8 billion, and said book sales would get a boost from the closure of rival Borders.
The company reported a loss of $56.6 million, or 99 cents per share, for the quarter, compared with a loss of $62.5 million, or $1.12 per share, a year earlier.
Shares of Barnes & Noble´s stock rose 8 percent on the news, to $12.38 per share, during midday trading on Tuesday.
Barnes & Noble has bet its future on the success of the Nook. Sales of the Nook group of devices, which includes a standalone and a touch-screen reader, jumped 140 percent to $277 million during the first quarter, comprising nearly 20 percent of the company’s total sales.
During a conference call with analysts, Chief Executive William Lynch said the bookseller now has about 26 percent of the e-book market, the same market share as last quarter.
By sales, Nook is now the No. 2 e-reader, following Amazon’s Kindle. The device also competes with Apple Inc.´s iPad tablet computer.
If the Nook and the e-books sales it generates live up to Barnes & Noble’s forecast, they would comprise one-quarter of the company´s sales and all of its growth.
Sales at Barnes & Noble superstores fell again in the fiscal first quarter, as readers continued migrating to e-books. Borders’ liquidation sales, which are scheduled to end next month, compounded the loss, the company said.
The book retailer said it expects sales to get a net boost for the year of $150 million to $200 million as Borders shoppers transition to Barnes & Noble.
Indeed, Lynch said he expects his stores to see their highest traffic level in five years during the upcoming holiday season.
Sales at Barnes & Noble´s superstores open at least 15 months declined 1.6 percent during the first quarter, while same-store sales at its College Bookstore chain fell 1.8 percent.
The retailer, which operates 704 bookstores, expects total sales of $7.4 billion for the fiscal year, which ends next April. The figures were in line with analysts’ estimates.
The company said it expects same-store sales at its bookstores to grow 2 percent to 3 percent for the year, driven primarily by Nook devices. It also expects same-store sales at its College Bookstore division to be flat.
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