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Bad earnings for Barnes & Noble: Nook revenues plunge 20%; Riggio bails on stores

Laura Hazard Owen

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. The Nook segment, which includes devices, digital content and accessories, fared much worse: 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.

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, seemingly a change in plan from the June announcement:

“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.”

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.

In addition, 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. “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. “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.

BKS data by YCharts

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