Source: retaildive.com, March 2019

Dive Brief:

  • Barnes & Noble on Thursday reported its best quarterly comp sales in several years, a rise of 1.1%. Total sales in the third quarter of fiscal 2019 were flat from the prior year, hitting $1.2 billion, according to a company press release.
  • Consolidated third quarter operating income was $79.2 million, compared to an operating loss of $34.9 million last year. The results included a $22.1 million asset impairment charge and non-recurring professional fees of $5.1 million.
  • Third quarter adjusted EBITDA was $133 million, down from $139.5 million last year, due to increased marketing and promotional spend, the company said. Barnes & Noble expects 2019 EBITDA between $140 million and $155 million considering the impact from incremental business investments and lower than expected post-holiday sales, the company also noted.

Dive Insight:

Barnes & Noble had its best holiday in years. That’s a big deal for a company that in the past blamed the fading of the short-lived coloring book fad for lackluster performance.

This year, executives took advantage of the void in the toy market left behind by Toys R Us, which liquidated ahead of the holidays. Through a pilot program, 91 stores were remodeled to feature toys. On a conference call with analysts Thursday morning, executives said it’s too early to analyze the results of those stores, but said that early results of the merchandising initiative have been good and that it’s something they’ll continue to evaluate throughout the year.

The company has so far opened four new stores in the fiscal year, and taken more steps to beef up its website experience. Online sales were down 2% in the quarter, executives said on the call, adding that the decline is reflective of a buy online, pickup in-store program as well as pressure on the textbook business. Excluding those things, e-commerce sales would be positive, they said.

“In fiscal 2019, we have been focused on growing the top line, which contributed to our best holiday in years,” Len Riggio, Chairman of Barnes & Noble, said in a statement. “Sales benefited from our new ad campaign, increased marketing and promotions, and an improved omni-channel experience for our customers. We believe these efforts are laying the foundation for sustained growth.”

Barnes & Noble has struggled to land its feet on stable ground after a tumultuous summer, during which its fourth CEO in about as many years, Demos Parneros, was fired for violating the company’s conduct code. The company is still looking for his replacement.

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