November 22, 2016 Last Updated 8:18 am

Barnes & Noble Q2 earnings sees sales fall 4%, losses trimmed

‘While we are pleased to have improved our performance due to expense reductions, we did experience sluggish sales, which we believe are directly related to the election cycle’

NEW YORK, NY – November 22, 2016 — Barnes & Noble, Inc. today reported sales and earnings for its fiscal 2017 second quarter ended October 29, 2016.

Total sales for the second quarter were $858.5 million, declining 4.0% as compared to the prior year. Retail sales, which include Barnes & Noble stores and BN.com, declined 3.5% to $830.7 million for the quarter. Comparable store sales declined 3.2% on lower store traffic, which was partly offset by the release of Harry Potter and the Cursed Child. NOOK®sales, which include digital content, devices and accessories, declined 19.4% to $35.0 million for the quarter.

The consolidated second quarter net loss was $20.4 million, or $0.29 per share, as compared to the prior year loss from continuing operations of $27.2 million, or $0.36 per share. For the quarter, Retail and NOOK incurred operating losses of $21.1 million and $8.2 million, respectively, for a total operating loss of $29.3 million.

Consolidated second quarter EBITDA was $0.7 million, a $21.2 million improvement versus the prior year. NOOK EBITDA losses of $2.7 million improved $18.5 million over the prior year on continued cost rationalization efforts. Retail EBITDA increased $2.7 million to $3.5 million, as lower severance charges offset the sales decrease.

“While we are pleased to have improved our performance due to expense reductions, we did experience sluggish sales, which we believe are directly related to the election cycle,” said Len Riggio, Chairman and Chief Executive Officer of Barnes & Noble, Inc. “With the election behind us, we hope and expect sales will improve over the holidays.”

Return of Capital

During the quarter, the Company returned $21.0 million in cash to its shareholders, including $11.0 million in dividends and $10.0 million through share repurchases. The Company acquired approximately 878,000 shares at an average price of $11.44 during the quarter under its share repurchase program.

Outlook

The Company continues to expect fiscal 2017 comparable store sales to decline in the low single digits and full year consolidated EBITDA to be in a range of $200 million to $250 million. Retail EBITDA is expected to be in a range of $240 million to $280 million, excluding the impact of any charges related to its cost reduction initiatives and costs associated with the recent CEO departure. NOOK EBITDA losses are expected to decline to a range of $30 million to $40 million, including previously announced transitional costs.

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