Barnes & Noble Q1 Loss Widens, Declares Dividend

(RTTNews) - Bookstore chain Barnes & Noble, Inc. (BKS) on Wednesday reported a loss for the first quarter that widened from last year, reflecting lower sales and margins as well as higher expenses. However, loss per share was wider than analysts' expectations, while quarterly revenues beat their estimates.

The company's board of directors declared a quarterly cash dividend of $0.15 per share payable on October 30, 2015, to stockholders of record on October 20, 2015.

The latest quarter's consolidated results include the Barnes & Noble College business, as the spin-off occurred after the quarter ended. The company expects Barnes & Noble College to be treated as a discontinued operation beginning with it's second-quarter results.

Allen Lindstrom, chief financial officer of Barnes & Noble said, "The Company successfully executed its major strategic initiatives during the first quarter, including the spin-off of its College business, the conversion of the Series J preferred shares into common shares and the initiation of a quarterly dividend. As we look to the second quarter and beyond, we are focused on opportunities to increase comparable store sales and reduce expenses."

The New York-based company's first-quarter net loss available to common shareholders was $44.52 million or $0.68 per share for the quarter, wider than loss of $33.15 million or $0.56 per share in the year-ago quarter.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.12 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the quarter decreased 1.5 percent to $1.22 billion from $1.24 billion in the same quarter last year, but beat analysts' consensus revenue estimate of $999.25 million.

The company's gross profit margin for the quarter declined 210 basis points from last year to 28.9 percent.

The retail segment, which consists of the Barnes & Noble bookstores and BN.com businesses, reported a 1.7 percent decline in revenues from the prior-year quarter to $939.00 million, reflecting store closures, lower online sales and lower warranty reimbursements.

However, comparable store sales for the segment increased 1.1 percent, benefiting from growth in non-book categories. Excluding sales of NOOK products, core comparable bookstore sales grew 1.0 percent.

College segment revenues grew 5.7 percent from the year-ago period to $238.98 million, benefiting from new store growth and a 1.8 percent comparable store sales increase.

The company's NOOK segment, which includes devices, digital content and accessories, reported a 22.4 percent decline in revenues from last year to $54.34 million.

Device and accessories sales decreased 6.2 percent and digital content sales were down 28 percent from last year.

Looking ahead to the second quarter, Barnes & Noble said it expects to incur separation related expenses of approximately $21 million as a result of the College business spin-off.

For fiscal 2016, Barnes & Noble affirmed its outlook for retail core comparable bookstore sales, which exclude sales of NOOK products, to grow about 1 percent. The company expects fiscal year EBITDA losses in the Nook segment to decline from the prior year.

Barnes & Noble said it plans to further reduce NOOK expenses through synergies with the retail business and expect to see those benefits during the balance of the fiscal year.

BKS is trading at $14.84, down $1.46 or 8.96 percent on a volume of 246,525 shares.