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Borders stock slides
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January 27, 1999: 3:13 p.m. ET
Bookseller gets cold shoulder from Wall St. after warning of sales lag
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NEW YORK (CNNfn) - Shares of Borders Group Inc. shed more than 15 percent of their value Wednesday after the book and music retailer said softer-than-expected sales will drive down quarterly results.
The Ann Arbor, Mich.-based company posted double-digit sales growth for the year ended Jan. 24, but said results for the latest quarter were lighter than projected and likely would lead to an earnings shortfall.
Earlier this month, Borders warned its fiscal 1999 profit would miss Wall Street estimates of $1.22. At the time, the company said it expected to earn between $1.14 and $1.18 a share.
The company revised its estimate downward again Wednesday, saying year-end earnings will be closer to $1.11 to $1.13 per share.
Consolidated sales increased nearly 15 percent to $2.6 million for the year, but quarterly sales growth was a different story.
While total sales for the three-month period rose 10.1 percent to $945.5, same-store sales for Borders' stores increased just 3.5 percent. Waldenbooks' stores sales decreased 1 percent and Borders.com generated sales of $4.6 million, with 57 percent of the volume generated in the fourth quarter.
The company's online activity is projected to generate a loss for fiscal 1998 of 12 cents to 13 cents a share.
"Comparable sales levels achieved in 1998 are totally unacceptable and we will devote our efforts to correcting that situation, focusing on a variety of sales and marketing initiatives in order to achieve the growth rates necessary to drive shareholder value," Borders' CEO Phil Pfeffer said.
Shareholders, however, are an unforgiving bunch.
Following the sales report, Borders' (BGP) stock sank 3-3/16 to 17-1/16, more than a 16 percent drop.
The company will release its fiscal 1998 results March 8.
In the meantime, Pfeffer said management will focus on correcting operational issues that negatively affected sales and earnings in 1998 and more aggressively market the Borders brand name. 
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Borders.com
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