Tags: Barnes andNoble | Nook | books | earnings

Barnes & Noble Reports Smaller Loss After Cutting Nook Costs

Tuesday, 09 Sep 2014 10:04 AM

Barnes & Noble Inc., the largest U.S. bookstore chain, reported a narrower first-quarter loss after cutting spending in its Nook e-reader division and moving toward a spinoff of the business.

The loss shrank to $28.4 million, or 56 cents a share, from $87 million, or $1.56 a share, a year earlier, the New York- based company said today in a statement.

Chief Executive Officer Mike Huseby agreed to spin off the company’s e-reader business in June after investors pushed for the move, saying it would add value at both the money-losing Nook unit and the profitable bookstore division. The company also has expanded its non-book merchandise, adding gifts and home goods like throw blankets.

“I thought the numbers were pretty good,” said John Tinker, an analyst at Maxim Group LLC who recommends buying the shares. “The Nook losses are down dramatically.”

Barnes & Noble rose 3.6 percent to $24.23 at 9:31 a.m. in New York. The shares had climbed 57 percent this year through yesterday.

Revenue fell 7 percent to $1.24 billion, including a 5.3 percent sales decrease at the bookstores and a similar percentage decline in same-store sales. Excluding the Nook, comparable-store sales fell 0.4 percent.

Barnes & Noble “continues to make progress” on separating the Nook unit and has been in discussions with potential existing and new partners, the company said. Nook sales fell 24 percent, a rate of decline that is slowing, Tinker said. “This has begun to stabilize,” he said.

Yuzu Costs

Costs for the college division’s Yuzu digital-education application were higher than he anticipated, the analyst said. While the division has upward potential, “the question is, growth at what price?”

Huseby, a former cable executive who’s been with the company since March 2012, took over in January after plunging Nook sales led to the departure of predecessor William Lynch. Since then, he’s scaled back spending on the digital business and tapped Samsung Electronics Co. to produce the latest version of the Nook. He’s also working with Google Inc.’s shopping service in three urban areas to offer same-day delivery.

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Barnes & Noble Inc., the largest U.S. bookstore chain, reported a narrower first-quarter loss after cutting spending in its Nook e-reader division and moving toward a spinoff of the business.
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2014-04-09
Tuesday, 09 Sep 2014 10:04 AM
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