Barnes & Noble Q4 Loss Narrows On Improved Margins

(RTTNews) - Bookstore chain Barnes & Noble, Inc. (BKS) reported Wednesday a loss for the fourth quarter that sharply narrowed from last year, despite a sales drop, reflecting improved gross margins.

However, loss per share came in wider than analysts' expectations and quarterly revenues matched their estimates. The company also provided segment sales guidance for full-year 2016.

The company said it expects to separate the Barnes & Noble, Inc. and Barnes & Noble Education businesses by the end of August, allowing each business to independently focus on their growth initiatives.

"The Company is successfully implementing strategic and operating initiatives resulting in the improved performance of each of our business units as evidenced by our 30% year-over-year consolidated EBITDA increase. We ended 2015 with an improved balance sheet, and also well positioned to move forward with a focus on operations and our customers," CEO Michael Huseby said.

The company noted that the latest quarter had one lesser week compared to the year-ago quarter.

The New York-based company posted a net loss available to common shareholders of $23.68 million or $0.37 per share for the quarter, narrower than $42.55 million or $0.72 per share in the year-ago quarter.

On average, three analysts polled by Thomson Reuters expected the company to report a loss of $0.39 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the quarter decreased 10.4 percent to $1.18 billion from $1.32 billion in the same quarter last year, and matched three Wall Street analysts' consensus estimate of $1.18 billion.

Barnes & Noble retail store sales, which consists of the Barnes & Noble bookstores and BN.com businesses, declined 9 percent to $869 million, and comparable store sales declined 1.3 percent. Excluding sales of NOOK products, core comparable bookstore sales decreased only 0.5 percent.

Barnes & Noble College sales decreased 8.1 percent to $274 million, while comparable store sales increased 6 percent.

The company's NOOK segment, which includes devices, digital content and accessories, reported a 39.8 percent revenue drop to $52 million from last year. Device and accessories sales decreased 48.2 percent, and digital content sales were down 36.5 percent from last year.

Gross profit margin for the quarter improved 180 basis points to 33.9 percent from last year's 32.1 percent.

Looking ahead to fiscal 2016, Barnes & Noble expects retail core comparable bookstore sales, which exclude sales of NOOK products, to grow about 1 percent. College comparable store sales are also expected to increase about 1 percent.

The company added that it intends to name CEO Michael Huseby as the executive chairman of Barnes & Noble Education when the proposed spin-off becomes effective.

BKS closed Wednesday's regular trading session at $26.33, down $0.29 on a volume of 1.09 million shares. In the past 52-week period, the stock has been trading in a range of $17.90 to $27.10.