Dive Brief:
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Barnes & Noble said Q2 (ended Oct. 31) sales were down 4.5% year over year to $895 million and posted a net loss of $27.2 million, or 36 cents a share, up from $5.1 million, or 16 cents a share, year over year. Q3’s Black Friday weekend same-store sales, minus Nook products, rose 1.1%.
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Earnings before interest, depreciation and amortization dropped to $20.5 million, due partly to the $10.5 million severance package to former CEO Michael P. Huseby, who has taken over at Barnes & Noble Education, the college-store business it spun off earlier this year. The company attributed the rest of the EBITDA drop to lower bookstore and online sales and bookstore wage increases.
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Overall Q2 retail sales fell 3.1% to $861 million because of decreased e-commerce sales, store closures, and a 1% decrease in same-store sales. Without Nook, Q2 same-store sales fell 0.5%, the company said. But the company’s shift to sell more than books apears to be paying off, with Q2 sales of toys and games rising 15%. The current popularity of coloring books and the release of Adele’s new album also helped lift sales.
Dive Insight:
Despite Barnes & Noble CEO Ron Boire's personal affinity for physical books, he’s not leaving the bookseller’s fortune to book sales.
Rather, Boire, who came on as CEO in September, told the New York Times that the bookseller is poised to become more than, well, a bookseller and more of a “lifestyle” brand.
“Everything we do around learning, personal growth and development fits our brand,” Boire told the paper. “There’s a lot of opportunity.”
That attitude could be key to its success, analysts told the Times.
“The real question is whether they can do it in an organic, integrated fashion, so that they’re not offering random merchandise, but it’s connected to a broader philosophy,” Lorraine Shanley, president of publishing consultancy Market Partners International, told the Times.
Others said that the retailer may be better poised with Boire at the helm, considering his experience at retailers like Sears Canada, Brookstone, Best Buy, and Toys R Us, and his clear vision for Barnes & Noble.
