September 7, 2017 Last Updated 12:24 pm

Barnes & Noble sales fall 6.6%, lower costs cuts into losses in first quarter ’18 earnings report

Just last week Barnes & Noble Education, Inc., which was spun off of Barnes & Noble in 2015, reported a $34.8 million loss in its Q1 fiscal 2018 earnings report. Now its the turn of the book retail itself to report — and it turns out it, too, is in operating in the red.

Barnes & Noble reported that total sales fell 6.6 percent, 4.9 percent on a same store basis. For the quarter, the retailer reported a $10.8 million, or $0.15 per share, though lower costs meant that this was less of a loss than what the company reported for the same quarter a year ago.

Still, investors were not happy, hammering the stock this morning when the news was released. The stock recovered a bit, but was still down over 7 percent at lunchtime.

Retail sales fell, which is somewhat understandable as stores have been closed. But Nook sales remain in the tank, dropping 28.1 percent this quarter. Costs for the unit were halved, so EBITDA was in the black, though barely.

Here is the Q1 report from book retailer Barnes & Noble:


NEW YORK, NY — September 7, 2017Barnes & Noble, Inc. 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 millionimprovement 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.

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