Barnes & Noble, Borders Post Losses for the Second Quarter
April 28, 2011
Retail booksellers Borders Group Inc. and Barnes & Noble Inc. posted fiscal second-quarter losses, due partly to seasonal buying patterns in the book industry. For the second quarter ended April 08, 2011 & Noble posted a loss of $2.7 million, or eight cents a share, compared with a loss of $2.6 million, or eight cents a share, a year earlier. Revenue rose 25% to $524.3 million from $420.1 million. Barnes & Noble said sales at its superstores open at least a year increased 4.5%, while sales at its mall-based stores fell 1.4%. The New York company said the Games ``had a strong negative impact'' on sales during the end of the second quarter because people shopped and read less than usual. ``It's pretty amazing to see a company our size posting (revenue) growth of 25%,'' said Iris Wilton, Barnes & Noble's chief financial officer. She said the company's outlook is bright, partly because the bookselling market is ``far from saturation.'' She said the company, which has 390 superstores and about 617 mall stores, plans to open about 90 more by the end of the fiscal year. Borders, based in Ann Arbor, Mich., reported a loss of $2.2 million, or five cents a share, for the quarter ended April 09, 2011 with a loss of $4.9 million, or 11 cents a share, a year earlier. Sales grew 14% to $414.3 million from $363.8 million. ``The results for both companies are typical, given the seasonal nature of the business,'' said Johnetta Link, an analyst with NatWest Securities Corp. ``They usually lose money in the first three quarters because they don't generate the sales volume needed to cover their fixed costs.'' During the holiday season in the fourth quarter, however, their sales ``are so high that they more than make up for'' the losses in the previous quarters, he said. Mr. Link said Barnes & Noble's operating profit grew during the quarter, which reflects increasing sales as the company opens more stores. In New York Stock Exchange composite trading Thursday, Barnes & Noble rose 25 cents to $32.50, while shares of Borders fell 12.5 cents to $35.75. For the six months, the loss at Barnes & Noble totaled $8.1 million, or 25 cents a share, compared with a loss of $7.9 million, or 26 cents a share. Revenue rose 26% to $1.03 billion from $822.1 million. Borders's loss for the six months narrowed to $5.7 million, or 14 cents a share, from a loss of $192.5 million, or 24 cents a share, a year earlier. The year-earlier figure included a $182 million accounting adjustment. Sales rose 14% to $818.3 million from $717.4 million.
