- The Washington Times - Thursday, March 19, 2009

NEW YORK (AP) - Barnes & Noble Inc., the nation’s largest bookstore chain, said Thursday that its profit fell 29 percent in the fiscal fourth quarter as sales dropped off because consumers scaled back on book purchases.

But adjusted results beat Wall Street’s expectations, and the bookseller provided a first-quarter earnings forecast in range of analysts’ estimates.

Its shares rose 50 cents, or 2.4 percent, to $21.51 in morning trading after rising earlier as high as $23.11.

The New York-based company earned $81.2 million, or $1.46 per share, during the quarter ended Jan. 31, compared with $115 million, or $1.79 per share, a year earlier.

Excluding a severance charge of 4 cents per share and a 17 cents-per-share charge related to the sale of its majority stake in Calendar Club, profit was $93.3 million, or $1.67 per share.

Last month Barnes & Noble sold its interest in Calendar Club back to the company and its chief executive for $1 million in cash. Calendar Club, a provider of calendars, games, puzzles, gifts and music boxes, added $113.5 million to Barnes & Noble’s 2008 revenue.

Sales for the quarter declined 6 percent to $1.63 billion from $1.74 billion as consumers purchased fewer books both in stores and online.

Same-store sales, or sales at stores open at least a year, dropped 7.3 percent during the quarter. Same-store sales are a key indicator of retailer performance since they measure growth at stores that were open in both periods and exclude sales from newly opened ones.

Analysts surveyed by Thomson Reuters, whose estimates generally exclude one-time items, predicted earnings of $1.48 per share on higher revenue of $1.78 billion.

For the fourth quarter, Barnes & Noble opened five of its namesake stores and closed seven. It also closed 19 B. Dalton stores.

The company forecast a first-quarter loss of 10 cents to 20 cents per share, while analysts expect a loss of 17 cents per share.

Same-store sales are predicted to decline between 6 percent and 9 percent during the quarter.

Barnes & Noble anticipates full-year profit of 95 cents to $1.25 per share, with same-store sales off 4 percent to 6 percent.

Wall Street predicts 2009 net income of $1.11 per share

Chief Executive Steve Riggio said in a statement that the company’s outlooks account for the likelihood of continued difficulties in 2009. The bookseller has also cut costs to deal with challenging economic conditions, but Riggio said it will still look to grow the business, such as with its acquisition of Fictionwise earlier this month.

Barnes & Noble purchased the New Jersey-based electronic bookseller for $15.7 million in cash, saying it would give the company a presence in the e-book market prior to the launch of its e-Bookstore later this year.

In January Barnes & Noble said it eliminated nearly 100 positions at its corporate headquarters as it attempted to lower overhead costs due to the sharp downturn in retail sales. The bookseller said most of the job cuts were due to a reduction in store openings and consolidation of functions within its retail and online operations.

For the year, profit slid 44 percent to $75.9 million, or $1.32 per share, from $135.8 million, or $2.03 per share, in the prior year. Annual revenue dipped 3 percent to $5.12 billion from $5.29 billion, while same-store sales declined 5.4 percent.

Barnes & Noble ran 726 of its namesake stores and 52 B. Dalton stores as of Jan. 31.

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