Barnes & Noble

Barnes & Noble Reports Fiscal 2018 First Quarter Financial Results

September 7, 2017
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First Quarter Operating Results Improve on Expense Reductions

 Barnes & Noble, Inc. (NYSE:BKS) today reported sales and earnings for its fiscal 2018 first quarter ended July 29, 2017.

Total sales for the first quarter were $853 million, declining 6.6% as compared to the prior year. Comparable store sales decreased 4.9%, as declines in non-book categories outpaced improved book trends during the quarter. The Company also experienced lower online and NOOK® sales during the quarter, which were impacted by the prior year eBook settlement and lower promotional activity.

The consolidated first quarter net loss improved to $10.8 million, or $0.15 per share, compared to a loss of $14.4 million, or $0.20 per share, in the prior year.

The consolidated first quarter operating loss of $15.2 million improved $6.2 million versus the prior year. Retail incurred an operating loss of $12.5 million, while NOOK incurred an operating loss of $2.7 million.

Consolidated first quarter EBITDA was $11.2 million, as compared to $9.6 million a year ago. NOOK generated EBITDA of $0.6 million, an $8.6 million improvement over the prior year on expense reductions. Retail EBITDA of $10.6 million decreased $7.0 million primarily due to the comparable store sales decline, somewhat mitigated by expense reductions.

“Our first quarter earnings results improved over the prior year, as we were able to mitigate the sales decline through expense reductions,” said Demos Parneros, Chief Executive Officer of Barnes & Noble, Inc. “We expect to improve our performance in the back-half of the year, which coupled with our focus on expense reduction, will enable us to achieve EBITDA of $180 million.”

Outlook

For fiscal year 2018, the Company continues to expect comparable bookstore sales to decline in the low single digits and full year consolidated EBITDA to be approximately $180 million.

Conference Call

A conference call with Barnes & Noble, Inc.’s senior management will be webcast beginning at 10:00 A.M. ET on Thursday, September 7, 2017, and is accessible at investors.barnesandnobleinc.com.

Barnes & Noble, Inc. will report fiscal 2018 second quarter results on or about November 30, 2017.

About Barnes & Noble, Inc.

Barnes & Noble, Inc. (NYSE: BKS) is the nation’s largest retail bookseller, and a leading retailer of content, digital media and educational products. The Company operates 632 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® tablets and eReaders and an expansive collection of digital reading and entertainment content through the NOOK Store®. The NOOK Store features more than 4.5 million digital books in the US (www.nook.com), plus periodicals and comics, 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.

BKS – Financial

       
BARNES & NOBLE, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
       
    13 weeks ended 13 weeks ended
    July 29, 2017 July 30, 2016
       
Sales   $853,316  $913,882 
Cost of sales and occupancy    599,835   636,343 
Gross profit    253,481   277,539 
Selling and administrative expenses    242,295   267,891 
Depreciation and amortization    26,398   31,037 
Operating loss    (15,212)  (21,389)
Interest expense, net    2,040   1,629 
Loss before taxes    (17,252)  (23,018)
Income taxes    (6,474)  (8,602)
Net loss   $(10,778) $(14,416)
       
Loss per common share:      
Basic   $(0.15) $(0.20)
Diluted   $(0.15) $(0.20)
       
Weighted average common shares outstanding:      
Basic    72,453   72,903 
Diluted    72,453   72,903 
       
Dividends declared per common share   $0.15  $0.15 
       
Percentage of sales:      
Sales    100.0%  100.0%
Cost of sales and occupancy    70.3%  69.6%
Gross profit    29.7%  30.4%
Selling and administrative expenses    28.4%  29.3%
Depreciation and amortization    3.1%  3.4%
Operating loss    -1.8%  -2.3%
Interest expense, net    0.2%  0.2%
Loss before taxes    -2.0%  -2.5%
Income taxes    -0.8%  -0.9%
Net loss    -1.3%  -1.6%
           
   
BARNES & NOBLE, INC. AND SUBSIDIARIES
Segment Information
(In thousands)
(Unaudited)
        
        
     13 weeks ended 13 weeks ended
     July 29, 2017 July 30, 2016
        
Sales       
 Retail   $830,036  $881,713 
 NOOK    29,500   41,048 
 Elimination    (6,220)  (8,879)
Total    $853,316  $913,882 
        
Gross Profit      
 Retail   $238,890  $258,287 
 NOOK    14,591   19,252 
Total    $253,481  $277,539 
        
Selling and Administrative Expenses      
 Retail   $228,321  $240,692 
 NOOK    13,974   27,199 
Total    $242,295  $267,891 
        
EBITDA      
 Retail   $10,569  $17,595 
 NOOK    617   (7,947)
Total    $11,186  $9,648 
        
Depreciation and Amortization      
 Retail   $(23,079) $(24,962)
 NOOK    (3,319)  (6,075)
Total    $(26,398) $(31,037)
        
Operating Loss      
 Retail   $(12,510) $(7,367)
 NOOK    (2,702)  (14,022)
Total    $(15,212) $(21,389)
        
Net Loss      
 Operating loss   $(15,212) $(21,389)
 Interest expense, net    (2,040)  (1,629)
 Income taxes    6,474   8,602 
Total    $(10,778) $(14,416)
        
        
        
Percentage of sales:      
        
Gross Margin      
 Retail    28.8%  29.3%
 NOOK    62.7%  59.8%
Total     29.7%  30.4%
        
Selling and Administrative Expenses      
 Retail    27.5%  27.3%
 NOOK    60.0%  84.6%
Total     28.4%  29.3%
        
EBITDA      
 Retail    1.3%  2.0%
 NOOK    2.7 

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