Barnes & Noble swings to 3rd-quarter profit
NEW YORK (AP) — Barnes & Noble reported a third-quarter profit as cost cuts at its Nook unit and elsewhere helped offset declining revenue across all of its segments.
Net income beat expectations and shares rose 2.4 percent in premarket trading.
Barnes & Noble has been trying to turn itself around as competition from discount stores and online retailers toughens, and as consumers shift away from traditional books to digital formats. The chain has invested heavily in its Nook unit, but that division has not been profitable.
The company said Wednesday that it is working to improve the value of its Nook unit. Barnes & Noble, as it announced earlier, cut some jobs after the quarter ended and said that there may be more job cuts ahead.
Nook losses narrowed "significantly," said CEO Michael Huseby, as the company cleared a backlog of Nooks that it didn't sell, as it had hoped to, during the holidays. But much of those sales were driven by discounts.
Barnes & Noble on Wednesday did not mention an offer last week from investment firm G Asset to buy 51 percent of the company for about $672 million.
Net income for the three months ended Jan. 25 totaled $63.2 million, or 86 cents per share. That compares with a loss of $3.7 million, or 14 cents per share in the prior year period. Analysts expected 51 cents per share, according to FactSet. Year ago results include $74 million in inventory related charges.
Revenue fell 10 percent to $2 billion, from $2.22 billion last year. Analysts expected $2.01 billion. Revenue from retail stores fell 6 percent to $1.4 billion. Revenue in stores open at least one year, a key retail metric, fell 4.9 percent.
College bookstore revenue fell 6 percent to $486.2 million. And Nook revenue fell 50 percent to $156.9 million due to lower unit volume sold and lower average selling prices. Barnes & Noble said it didn't introduce any new tablet products for the holiday and focused on selling through its existing inventory.
Barnes & Noble stuck by earlier projections of single-digit percentage declines in revenue at its stores, and declines of low- to mid-single digit range at college stores.