Barnes & Noble, Inc. today reported sales and earnings for its fiscal 2013 first quarter ended July 28, 2012.
First quarter consolidated revenues increased 2.5 percent to $1.5 billion as compared to the prior year. First quarter consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) was $4 million as compared to a loss of $24 million a year ago. The consolidated first quarter net loss declined 28 percent as compared to the prior year to $41.0 million, or $0.78 per share.
"During the first quarter, we continued to see improvement in both our rapidly growing NOOK business, which saw digital content sales increase 46 percent during the quarter, and at our bookstores, which continue to benefit from market consolidation and strong sales of the Fifty Shades series," said William Lynch, CEO of Barnes & Noble. "The growth in comps at retail and the continued strong growth of our digital content business, as well as increased cost management focus, were drivers in the business turning from an EBITDA loss last year to slightly positive EBITDA in the first quarter of this year. As announced yesterday, we are excited to expand our award winning NOOK digital bookstore and devices beyond the U.S. market and to work with U.K. retailers to bring millions of U.K. customers the best experience in digital reading."
The Retail segment, which consists of the Barnes & Noble bookstores and BN.com businesses, had revenues of $1.1 billion for the quarter, increasing 2 percent over the prior year. Comparable bookstore sales increased 4.6 percent for the quarter, as compared to the prior year period. Comparable bookstore sales continued to benefit from the liquidation of Borders' bookstores in fiscal 2012 and strong sales of the Fifty Shades of Grey series. Core comparable bookstore sales, which exclude sales of NOOK products, increased 7.6 percent for the quarter. BN.com sales continued to decline for the quarter.
Retail earnings before interest, taxes, depreciation and amortization (EBITDA) increased from $40 million to $75 million during the first quarter, an 88 percent increase, driven by comparable sales increases, a higher mix of higher margin core products and increased store productivity.
The College segment, which consists of the Barnes & Noble College bookstores business, had revenues of $221 million during this non-back-to-school rush period. Comparable College store sales decreased 2.0 percent for the quarter, as compared to the prior year period. College comparable store sales reflect the retail selling price of a new or used textbook when rented, rather than solely the rental fee received and amortized over the rental period.
College EBITDA losses increased by $2 million during the quarter from a loss of $12 million a year ago to a loss of $14 million, driven by new store expenses and investments in digital education.
The NOOK segment, which consists of the company's digital business (including Readers, digital content and accessories), had revenues of $192 million for the quarter, essentially flat as compared to last year. Digital content sales increased 46 percent for the first quarter. Digital content sales are defined to include digital books, digital newsstand, and the apps business. Device sales declined for the quarter due to lower average selling prices and production scaling issues surrounding the popular newly launched Glowlight product resulting in unmet demand.
NOOK EBITDA losses increased by $6 million, from a loss of $51 million to a loss of $57 million, as a result of product markdowns on the recently announced NOOK price adjustments, as well as continued investments in the NOOK business.
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