Barnes & Noble swings to Q4 loss on sharp decline in Nook e-book sales
NEW YORK — Barnes & Noble reported on Thursday a loss in the fiscal third quarter, hurt by a 26% decline in revenue for its Nook e-book readers.
The company posted a loss of $6.1 million quarter through Jan. 26, compared to a profit of $52 million in the year-ago period. The retailer blamed the loss partially on charges stemming from weaker-than-expected sales of Nook e-readers during the holiday shopping season.
Revenue fell 9% to $2.22 billion. Analysts had predicted sales of $2.4 billion.
Revenue from the company’s retail unit dropped 10% to $1.51 billion. Same-store sales fell 7.3%. Excluding Nook sales, same-store sales edged down 2.2%.
Barnes & Noble released its results just days after company founder, chairman and largest shareholder, Leonard Riggio, announced plans to offer to buy the physical bookstores and website of Barnes & Noble, but not the Nook unit. On Thursday, the company said it has appointed board members to evaluate a proposal when it is made.
In response to the Nook sales shortfall over the holiday season, Barnes & Noble said Nook is calibrating its business model and has implemented a cost reduction program that the company projects will significantly reduce the related expenses.
“In terms of the Nook Media business, we’ve taken significant actions to begin to right size our cost structure in the Nook segment, while also taking a large markdown on Nook devices in order to enhance our ability to achieve our estimated sales plans in subsequent quarters,” stated William Lynch, CEO of Barnes & Noble. “Nook Media has been financing itself since October of 2012 due to the strong investment partners we've been able to attract in Microsoft and Pearson. Coming off the holiday shortfall, we're in the process of making some adjustments to our strategy as we continue to pursue the exciting growth opportunities ahead for us in the consumer and digital education content markets.”