In the past quarter, Barnes & Noble’s CEO resigned, and the company announced it would stop manufacturing tablets in-house as a way to cut heavy losses in the Nook division. So investors and others have been waiting for today’s earnings report with a mixture of trepidation and curiosity, and the bookseller’s stock was down Monday ahead of the earnings.
Tuesday morning, they got another bad earnings report: Barnes & Noble’s revenues were down 8.5 percent, to $1.3 billion, and the company saw a net loss of $87 million, or $1.56 per share. Investors had expected a loss of $0.81 per share. Along with the disappointing earnings report comes a hefty dose of confusion about what, exactly, the company plans to do with the Nook business. Barnes & Noble shares were down over 11 percent on Tuesday morning.
The Nook segment, which includes devices, digital content and accessories, fared worse than the company as a whole: Revenues were $153 million, down 20.2 percent from this time last year. Both device sales and digital content sales declined: Sales of devices and accessories were down 23.1 percent over last year, to $84 million, and digital content sales were $69 million, down 15.8 percent.
Barnes & Noble’s retail segment, which consists of its bricks-and-mortar stores and BN.com, also fared badly: Revenues were $1.0 billion for the quarter, down 9.9 percent over last year.B&N will keep making and selling tablets after all?
Michael Huseby, who was appointed CEO of Nook Media after B&N CEO William Lynch resigned, noted in a statement that the company plans to release another Nook device this fall — and also said that the company will continue to sell Nook HD and HD+ tablets and develop both black and white and color devices. This seems to be a complete change in strategy from the announcement less than two months ago that Barnes & Noble would stop manufacturing tablets and focus on e-ink devices:
“Our top priority in our operating strategy is to increase all categories of our content revenue. We are working on innovative ways to sell content to our existing customers and are exploring new markets we can serve successfully. The company intends to continue to design and develop cutting-edge NOOK black and white and color devices. We will continue to offer our award-winning line of Nook products including Nook Simple Touch, Nook Simple Touch with Glow Light, Nook HD and Nook HD+ at the best values in the marketplace. At least one new NOOK device will be released for the coming holiday season and further products are in development. All Nook devices will continue to be backed by world-class pre- and post-sales support in Barnes & Noble stores, as well as ongoing software upgrades and improvements to the digital bookstore service.”Riggio bails on plan to take stores private
An SEC filing shows that Barnes & Noble chairman Leonard Riggio is abandoning his plan to make a bid for Barnes & Noble’s retail stores and take them private. (At the time of Lynch’s resignation, I’d suggested that spinning off the stores might give them their best chance at survival.) “While I reserve the right to pursue an offer in the future, I believe it is in the company’s best interests to focus on the business at hand,” Riggio said in a statement, and went on to stress the importance of the Nook business: “Right now our priority should be to serve the more than 10 million customers who own Nook devices, to concentrate on building our retail business, and to accelerate the sale of Nook products in our stores, and in the marketplace.”
Barnes & Noble is holding an investor call at 10 AM ET and we will be on the call.
More From paidContent.org
- Investment & Company Information