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B&N posts 1Q loss
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May 24, 2001: 1:20 p.m. ET
Bookseller cites B. Dalton sales decline, weakness at super stores
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NEW YORK (CNNfn) - Barnes & Noble Inc. reported a loss for its fiscal first quarter Thursday, hurt by declining sales at its B. Dalton bookstores and below-plan sales at its super stores, though the results were a bit better than Wall Street forecasts for the No. 1 U.S. bookstore chain.
Barnes & Noble (BKS: down $0.82 to $32.80, Research, Estimates) stock dipped more than 2 percent in early Thursday afternoon trading following the report, reflecting investor concern with its sluggish core bookstore sales, according to one analyst.
For the quarter ended May 5, New York-based Barnes & Noble reported a loss excluding charges of 12 cents a share compared with break even results a year earlier. Analysts polled by earnings tracker First Call anticipated a loss of 14 cents a share.
Including charges, the company posted a net loss of $11.5 million, or 18 cents a share, compared with a loss of $4.1 million, or 6 cents a share, a year earlier.
Total sales rose to $1 billion from $894.3 million.
While its total bookstore sales increased 4.3 percent from a year ago, the company posted a 1.8 percent sales decline at its mall-based B. Dalton bookstores and a lower-than-expected 2.3 increase at its super stores.
Jefferies & Company Inc. retail analyst Donald Trott said investor concern about declining sales at the core bookstore business likely explains the stock's dip Thursday.
Barnes and Noble, which also owns the video game retail chains Babbage's and Funcoland, reported a 13.2 sales increase at Babbage's stores open at least a year and forecast a strong fourth quarter for both chains as new video game consoles and games go on sale for the holiday season.
"I think it's going to be very, very good," Trott said of the video game division. "The question is, is it very, very good, or is it hey, this is just super-great hall-of-fame good?"
Barnes & Noble said it will begin a comprehensive cost reduction program in the second quarter to continue for the rest of the year in an effort to improve the bottom line. Despite lowering guidance for sales at its super stores open at least a year, a key gauge called same-store sales, the company still anticipates those stores will meet previously announced earnings targets.
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The company also agreed to pay $2.4 million in the first quarter to settle a lawsuit brought by the American Booksellers Association alleging that the chain was improperly displacing smaller, independently owned bookstores. That charge shaved 4 cents off earnings, the company said.
Barnes and Noble's publicly traded online unit, Barnesandnoble.com Inc. reported better-than-expected first quarter earnings on Apr. 26. The company has been gaining market share on rival Internet retailer Amazon.com (AMZN: down $0.17 to $15.43, Research, Estimates), which recently announced a partnership with Borders Group Inc. (BGP: down $0.76 to $18.54, Research, Estimates) to sell Borders' books online. 
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Barnes & Noble
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