Barnes & Noble report Q3 loss

Less foot traffic causes lower same-store sales

By Danny King -- Video Business, 11/20/2008

NOV. 20 | Barnes & Noble said today that it had a fiscal third-quarter loss as less foot traffic caused by the economic slowdown cut same-store sales of books, DVDs and CDs. The largest U.S. books retailer also reduced its earnings forecast for the fiscal year and said it would open fewer stores next year than it had previously planned.

Same-store sales for the quarter ended Nov. 1 declined 7.4%, with CD sales "significantly negative—much more than the overall store," Barnes & Noble chief financial officer Joseph Lombardi said on a conference call with analysts this morning. The company didn't break out DVD sales.

Overall, Barnes & Noble had a fiscal third-quarter loss of $18.4 million, or 34¢ a share, compared with net income of $4.38 million, or 7¢, a year earlier as sales fell 4.4% to $1.12 billion. Excluding a one-time charge, Barnes & Noble had a loss of 21¢ a share. The company was expected to lose 16¢ on sales of $1.17 billion, the average analyst estimate in a Thomson Financial survey.

"We're obviously seeing the same type of decline reported by other retailers," Barnes & Noble CEO Stephen Riggio said on the call today. He added that books publishers reduced their releases during the quarter because of expectations that the U.S. presidential election would divert interest from new titles.

With fiscal fourth-quarter comparable-store sales expected to be down as much as 9%, Barnes & Noble cut its fiscal year profit forecast to as much as $1.60 a share from its August forecast of as much as $1.90.

The company also said today that it would open 15 new stores during the next fiscal year, down from its prior plan of as many as 25 new stores.