Barnes & Noble Posts 2% Gain in Sales For First Quarter

May 25, 2006
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May 25 – June 1, 2006 Edition

Barnes & Noble Posts

2% Gain in Sales

For First Quarter

New York, NY/5/18/06¬óBarnes & Noble, Inc. (NYSE: BKS), the world’s largest bookseller, today reported sales and earnings for the first quarter ended April 29, 2006. 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 June 9, 2006, payable on June 30, 2006.

Sales for the first quarter increased 2% to $1.1 billion. Barnes & Noble store sales increased 2% to $980.5 million, with comparable store sales decreasing 0.3% for the quarter. B. Dalton sales were $23.3 million for the quarter, a 26% decrease due to store closings and a 1.8% comparable store sales decline. Sales at Barnes & Noble.com of $91.1 million for the quarter were flat compared to the prior year period.

Bestselling titles during the quarter included John Grogan’s Marley & Me, James Patterson’s Fifth Horseman, Stephen King’s Cell, Giada de Laurentiis’ Giada’s Family Dinners and Jim Cramer’s Real Money.

First quarter net earnings were $10.0 million or $0.14 per share, in-line with company guidance of $0.10 to $0.14 per share. Effective this quarter, the company has adopted Statement of Financial Accounting Standards No. 123(R) (As Amended), “Share-Based Payment,” and began expensing stock options at the beginning of fiscal year 2006.

Excluding a $0.04 per share impact due to stock compensation expense, first quarter net earnings were $0.18 per share, representing a 31% increase compared to the prior year.

In the first quarter of 2006, the company acquired 2.2 million shares for $93 million under its share repurchase program.

GUIDANCE

For the second quarter, the company expects comparable store sales at Barnes & Noble stores to decrease in the low-single digits due to the difficult comparisons against last year’s 4.3% comparable store sales increase, which included extraordinary sales of Harry Potter and the Half-Blood Prince. For the full year, the company continues to expect comparable store sales to be in the low single digits.

Barnes & Noble, Inc.’s second quarter earnings per share is expected to be in a range of $0.22 to $0.26, which includes stock compensation expense of $0.04 per share. For the full year, the company continues to expect earnings per share to be in a range of $2.20 to $2.30, which includes stock compensation expense of $0.15 per share.

As of April 29, 2006, the company operated 684 Barnes & Noble stores and 113 B. Dalton stores. During the first quarter, eight Barnes & Noble stores were opened and five were closed. B. Dalton closed five stores during the quarter.

A conference call with Barnes & Noble, Inc.’s senior management will be webcast beginning at 11:00 A.M. ET on Thursday, May 18, 2006, and is accessible at www.barnesandnobleinc.com/webcasts . The call will also be archived at www.fulldisclosure.com for one year.

Barnes & Noble, Inc. will report second quarter earnings on or about August 17, 2006.

ABOUT BARNES & NOBLE, INC.

Barnes & Noble, Inc. (NYSE: BKS), the world’s largest bookseller and a Fortune 500 company, operates 797 bookstores in 50 states. For the fourth year in a row, the company is the nation’s top retail brand for quality, according to the EquiTrend Brand Study by Harris Interactive. Barnes & Noble conducts its online business through Barnes & Noble.com ( www.bn.com), one of the Web’s largest e-commerce sites and the number one online bookseller for quality among e-commerce companies, according to the latest EquiTrend survey.

General information on Barnes & Noble, Inc. can be obtained via the Internet by visiting the company’s corporate Web site: http://www.barnesandnobleinc.com.

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