Barnes & Noble revenue and earnings trend continue to be worrisome for newsstand sales
Morning Brief: Sales at the US bookseller fell 4.5%, while Q2 EBITDA was a loss of $20.5M, which included a $10.5M executive severance charge related to the B&N College spin-off
The closure of Borders was greeted with a ho hum from magazine and newspaper publishers, at least in public, despite the fact that the loss of such an important print newsstand would have a serious impact on single copy sales. Years later now, and combined with the loss of a major distributor, sales continue their downward momentum.
Now, let’s consider Barnes & Noble. One might have thought that the loss of such a major competitor as Borders would mean B&N would be in a nearly monopoly position, but alas that online company they compete with seems to rolling along.
Yesterday afternoon B&N issued their Q2 2016 earnings and the company reported a loss of 52 cents per share on $894.65 million in revenue for the quarter. The results led investors to once again take the stock down.
In the conference call CEO Ronald Boire said results were pretty much in line with expectations, and that “toys and games and gift businesses continue to grow, with toys and games growing 14.9 percent this quarter.” Growing the non-publishing products side of the business has been a priority of the new CEO who came in from Sears Canada.
“However, the challenges were greater than anticipated,” Boire said, explaining that website traffic and sales were down. “During the second quarter, we implemented a significant number of website fixes to increase traffic, improve the overall user experience and stabilize the site.”
The reality is that customers, if they are buying online, are using Amazon.com to make purchases. B&N’s advantage remains their brick and mortar stores, though the company is in the process of running through its leases and closing locations.
But the issue for other publishers, especially those dependent on newsstand sales, is that B&N is heading in the opposite direction that magazine publishers, in particular, would like to see.
Some are feeling a little smug because several active Twitter users in the media fell for the hoax that the shooter in San Bernardino was named Tayyeep Bin Erdogan, said to be 28 and of Qatar. It was a mashup of names and completely bogus.
But it was also not that widely reported, and only I saw the tweet once, though not directly (it was an unfortunate retweet or a retweet).
I actually think the media did a better job, at least on my timeline, of making sure not to get too far ahead of the story. But then again, everyone’s timeline will vary.
The US economy added 211,000 jobs in November, bad news for those with variable rate loans – your interest rate is about to go up.
I doubt there is anyway to stop the Fed now as job growth, though not robust, continues to be strong enough to motivate the Fed to raise rates.
I happen to know a number of publishers that will have been dreading this day, though. While attempting to make it from the fiscal crisis of the last year of the Bush administration, to today, they have been hoping for a sharp rise in ad pages – something they has not occurred. These small publishers are the ones that take out standard business loans, some with variable rates.