Barnes & Noble reports revenues of $1.2bn for the 9-week holiday period, 11% down on the previous year

Barnes & Noble reports revenues of $1.2bn for the 9-week holiday period, 11% down on the previous ...

Barnes & Noble has delivered it holiday sales report for the nine-week period ended December 29, 2012, with its retail segment – constituting bricks and mortar stores and its online businesses – securing $1.2bn in revenues.

This figure represents a decrease of 10.9% on the same period the previous year, and the company attributes the bulk of the drop to an 8.2% decline in “comparable store sales, store closures and lower online sales.”

Core comparable store sales, which doesn’t include sales of NOOK-related products, decreased 3.1% compared to the prior year due to lower physical bookstore traffic.

Sales of NOOK products in the Retail segment declined during the holiday period too. Its NOOK segment, which consists of Readers, e-books and related accessories, notched up revenues of $311 million for the nine-week holiday period, a fall of 12.6% as compared to the same period in 2011. More specifically, NOOK device unit sales declined during the holiday period as compared to the prior year, though B&N didn’t give any more specifics around that.

In an attempt to shine some positive light on these figures, B&N notes that bookstore sales of core products actually exceeded the company’s expectations, and thus it’s anticipating Retail comparable bookstore sales to fall on a “percentage basis”, around the low- to mid-single digits in 2013.

In context

Back in November, B&N reported its fiscal second quarter financial results, with Q2 consolidated revenues reaching $1.9 billion, a decrease of 0.4% year-on-year. Consolidated net earnings were $2 million, compared to a loss of $7 million on the previous year, as Nook revenues totalled $160 million for the quarter, up 6% year-on-year. Sales of ebooks, digital newsstand subscriptions, and apps increased 38% year-on-year, as the company pushed its Android tablets to the US market.

However, it’s worth noting that digital content sales grew by 13.1% this holiday period, an element which includes digital books, digital newsstand, and apps. It could be that sales of NOOKs, and ereaders in general, are starting to plateau, a notion backed by the fact there has been such a growth in digital content sales.

“We entered the holiday with two great new products, NOOK HD and NOOK HD+, both highly rated media tablets of phenomenal quality,” said William Lynch, Chief Executive Officer of Barnes & Noble. “NOOK device sales got off to a good start over the Black Friday period, but then fell short of expectations for the balance of holiday. We are examining the root cause of the December shortfall in sales, and will adjust our strategies accordingly going forward.”

However, as a result of the NOOK sales shortfall, B&N says it’s expecting its fiscal year 2013 NOOK Media (Microsoft-Barnes & Noble joint venture) revenues of approximately $3bn, and NOOK segment EBITDA (Earnings before interest, taxes, depreciation and amortization) losses at a comparable level to last year.

It’s also worth noting here that Pearson bought a 5% stake in NOOK Media late last year, for $89.5m; valuing it at $1.8bn. The strategic investment deal saw Pearson gain a 5% stake in the firm, which operates Barnes & Noble’s digital businesses, including its NOOK e-reader and tablets, digital bookstore and its 674 college bookstores across America.

Feature Image Credit – Thinkstock

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