With 6.1 Billion in revenues expected this year, and 6.7 Billion next year I am encouraged. When the economy returns to a more normal state I feel it's easy to expect margins return to the 2-3% range. With margins at 2.5% on 6.7 Billion in revenue we would see EPS well over 3$ and a share price of 50$ or more wouldn't be an unreasonable multiple. With the current price being under book (but over working capital) This has a lot of potential!
> "With 6.1 Billion in revenues expected this year, and 6.7 Billion next year I am encouraged."
You're misunderstanding the reason for the increase. The increase is simply due to only half year of College sales being included this year and full year of College sales next year. The actual revenue in the combined business is still declining so there's no reason to be encouraged.
College Booksellers is expected to remain about flat +/- 1% and Barnes and noble expects -2 to -4%, so you are correct about sales declining slightly, but in case you haven't noticed the economy is pretty slow right now. I do not see that trend continuing with an improvement in the economy. I feel that when B&N quits blowing money on acquisitions and technology this could earn well over 3$ per share. I may be voting for Ron Burkle's nominees for the board this fall.
I don't know how the market will react. The numbers will not look good [FOR THE QUARTER] Adding a big percentage of College textbook stores into the mix will obviously not look good during the time of year that Universities are winding down. I feel the key ahead is revenues. It helps that we have the bulk of expenses with the nook behind us. The focus can be on earnings from recent investments going forward. Even modest margins ahead could make this a huge success.