Wednesday, November 21, 2007

Barnes & Noble Report 3rd Quarter

Barnes & Noble reported a solid same store sales increase of 2.6% and a 14.5% increase in dot com revenues for the third quarter. Gross revenues exceeded $1.2billion which reflected a 5.7% increase over the same period last year. Net income for the period was $4.4million or $0.07 per share but reflected an after tax benefit of $6.2million ($0.09/share). Excluding the one time effect, the company had a third quarter loss of $1.8milion or $0.03/share which was was "better than guidance of a loss of $0.06 to $0.10 per share."

From the press release:
“The company’s sales continued to perform at the higher end of expectations, due in part to strong sales of new releases and bestsellers, which combined with a better than expected gross margin rate enabled the company to outperform its third quarter earnings expectations,” said Steve Riggio, chief executive officer of Barnes & Noble, Inc. “In addition, we are encouraged by the sales trends at Barnes & that began earlier this year and continued through the third quarter, in which we launched a newly designed website.”

The company also raised guidance for the full year (which should be anticipated given this and the second quarter performance). The company now expects full-year GAAP earnings per share to be in a range of $1.91 to $2.09, compared to previous guidance of $1.69 to $1.87.

B&N's stock price has fluctuated over the past six months from a mid-year high of $43 to its current $36. On the basis of these reported results the share price jumped on Tuesday. In contrast to Borders share performance and market cap ($715million), B&N has a market cap of over $2.4billion. Looking at that comparison with Borders may well make some private equity bankers sweat in anticipation.

Press release

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