Barnes & Noble Reports Fiscal 2012 First Quarter Financial Results
(Press Release) New York, NY (August 30, 2011)— Barnes & Noble, Inc., the world's largest bookseller, today reported sales and earnings for its fiscal 2012 first quarter ended July 30, 2011.
FIRST QUARTER RESULTS
Total sales for the first quarter were $1.4 billion, a 2% increase compared to the prior year. Sales through BN.com increased 37% as compared to the prior year to $198 million, with comparable sales increasing 65%. This increase was driven by strong demand for the NOOK product line, including the continued success of the Award Winning NOOK Color, the mid-quarter launch of the NOOK Simple Touch Reader and a quadrupling of digital content sales over last year's first quarter.
Barnes & Noble store sales decreased 3% to $1 billion, with comparable store sales decreasing 1.6% for the quarter. While traditional physical book sales declined during the quarter, the stores posted large increases in sales of the NOOK product line and Toys & Games. In a non-back-to-school period, Barnes & Noble College Bookstore ("College") sales declined 2% to $220 million, with comparable store sales decreasing 1.8%.
The consolidated NOOK business across all of the company's segments, including sales of digital content, device hardware and related accessories, increased 140% in the first quarter to $277 million, on a comparable sales basis.
The company's earnings before interest, taxes, depreciation and amortization (EBITDA) improved 23% this quarter from a loss of $30.7 million to $23.6 million. For the first quarter, the company reported a consolidated net loss of $57 million, or $0.99 per share. The company's effective tax rate is 36.2%, lower than its previous rate of 39.7%. The change in the effective tax rate had a $0.05 per share impact on the quarter. Excluding the impact of the tax rate change, the company's net loss per share was $0.94.
"Our strategy of growing market share in the exploding digital content business while maximizing cash flow and EBITDA from our retail operations is paying off," said William Lynch, chief executive officer. "We plan to continue investing in the significant growth areas of our business, and in fiscal 2012, we expect to see leverage as our digital sales growth is projected to exceed the growth of investment spend. Additionally, the return on investment is expected to increase in future years, as readers purchase increasing amounts of digital content on the platform we have built."
"Our NOOK eReaders and applications continue to be cited as the finest digital reading products on the market, with the new NOOK Simple Touch Reader recently rated as the best eReader," Mr. Lynch added. "The company is encouraged by the progress achieved against our strategy and believes in our plan to continue to appropriately invest in the massive digital opportunity, while delivering strong EBITDA growth this year."
For the full fiscal year 2012 consolidated sales are forecasted to be $7.4 billion. Comparable sales at BN.com are expected to increase 60% to 70%. Barnes & Noble comparable store sales are expected to increase 2% to 3% and College's comparable store sales are expected to be flat. The company expects a $150 million to $200 million sales lift in this fiscal year following the complete liquidation of Borders stores. The consolidated NOOK business across all of the company's segments, including sales of digital content, device hardware and related accessories, is expected to double this year to $1.8 billion from $880 million last year and $123 million in fiscal 2010, on a comparable sales basis.
The company expects full year earnings before interest, taxes, depreciation and amortization (EBITDA) to be in a range of $210 million to $250 million, representing a 30% to 50% increase as compared to the prior year. This year's EBITDA forecast includes transaction, advisory and legal costs of approximately $15 million related to the strategic alternatives process and the recently completed $204 million investment made by Liberty Media in the company. The company expects full year losses per share to be in a range of $0.10 to $0.50.
A conference call with Barnes & Noble, Inc.'s senior management will be webcast beginning at 10:00 A.M. ET on Tuesday, August 30, 2011, and is accessible at www.barnesandnobleinc.com/webcasts.
Barnes & Noble, Inc. will report fiscal 2012 second quarter earnings results on or about November 22, 2011.
ABOUT BARNES & NOBLE, INC.
Barnes & Noble, Inc., the world's largest bookseller and a Fortune 500 company, operates 704 bookstores in 50 states. Barnes & Noble College Booksellers, LLC, a wholly-owned subsidiary of Barnes & Noble, also operates 635 college bookstores serving over 4.6 million students and faculty members at colleges and universities across the United States. Barnes & Noble conducts its online business through BN.com, one of the Web's largest e-commerce sites, which also features more than two million titles in its NOOK Bookstore(TM). Through Barnes & Noble's NOOK(TM) eReading product offering, customers can buy and read eBooks on the widest range of platforms, including NOOK eBook Readers, devices from partner companies, and hundreds of the most popular mobile and computing devices using free NOOK software.
General information on Barnes & Noble, Inc. can be obtained via the Internet by visiting the company's corporate website.
The All-New NOOK(TM), The Simple Touch Reader(TM), NOOK(TM), NOOK 1st Edition(TM), NOOK Wi-Fi 1st Edition(TM), NOOK Color(TM), Reader's Tablet(TM), Fast Page(TM), NOOK Books(TM), NOOK Bookstore(TM), NOOK Newsstand(TM), PubIt!(TM), NOOK Kids(TM), Read In Store(TM), More In Store(TM), NOOK Friends(TM), LendMe(R), NOOK Library(TM), NOOK Boutiques(TM), The Barnes & Noble Promise(TM), NOOK Books en español(TM), NOOK Study(TM), Free Friday(TM), Lifetime Library(TM) and Read What You Love. Anywhere You Like(TM) are trademarks of Barnes & Noble, Inc. Other trademarks referenced in this release are the property of their respective owners.