Bookseller Blames Online Shopping -- WSJ
March 03 2017 - 3:02AM
Dow Jones News
By Jeffrey A. Trachtenberg
Barnes & Noble Inc. reported a disappointing holiday quarter
and provided a downbeat prognosis for the fiscal year that ends in
April as consumers spent less time shopping in its stores and more
time making their purchases online.
The issue of declining store traffic has affected other leading
retailers. Earlier this week, Target Corp. reported lower sales and
profits for its holiday quarter and said its 2017 profit would be
significantly lower than previously expected.
Barnes & Noble reported sales of $1.3 billion in the quarter
that ended Jan. 28, down 8% from a year earlier. Profit fell 12% to
$70.3 million, or 96 cents a share, from $80.3 million, or $1.04 a
share. Analysts had projected earnings of $1.13 a share on $1.28
billion in revenue.
Barnes & Noble shares fell 8.6% to $9.05 on the New York
Stock Exchange on Thursday.
During an investor call, Chief Executive Leonard Riggio said
Demos Parneros, who was named chief operating officer in November,
is a leading candidate to succeed him. Mr. Riggio, 76 years old,
returned as CEO in 2016 instead of retiring. He didn't offer
investors any insight into how long he intends to remain in his
post.
Same-store sales fell 8.3% in the fiscal third quarter, largely
due to lower traffic and a decline in sales of coloring books and
artist supplies. There was also a tough comparison to last year
when a new album from singer Adele sold briskly. Those items
accounted for nearly one-third of the sales decline.
"We are witnessing a major shift in the way retail works and the
type of stores that need to be opened," said Mr. Riggio, who noted
that book subjects aren't appearing as much on evening news
programs or morning news and entertainment shows. "All the talk now
is politics."
Barnes & Noble, which has closed a number of stores in
recent years, has now opened three test stores designed to make it
easier for consumers to find the titles they want. All three offer
full-service restaurants. It is unclear whether the final prototype
will have such a restaurant, Mr. Riggio said in an interview.
Barnes & Noble now expects comparable-store sales will
decline about 7% for the full fiscal year and consolidated earnings
before interest, taxes, depreciation and amortization will be
between $180 million and $190 million. In early January, the
retailer forecast full-year Ebitda would be around $200 million
while comparable-store sales would decline approximately 6%.
"Retail is soft in general," said John Tinker, an analyst with
Gabelli & Co. "The big issue is that there is less foot
traffic."
Barnes & Noble ended its fiscal third quarter with $18.2
million in long-term debt compared with no long-term debt a year
earlier. The retailer returned $14.4 million to shareholders during
the quarter in the form of dividends and share repurchases.
--
Anne Steele contributed to this article.
Write to Jeffrey A. Trachtenberg at
jeffrey.trachtenberg@wsj.com
(END) Dow Jones Newswires
March 03, 2017 02:47 ET (07:47 GMT)
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