Barnes & Noble Q3 Profit Up 14%, But Misses View

(RTTNews) - Bookstore chain Barnes & Noble Inc. (BKS) on Tuesday reported a 14 percent increase in profit for the third quarter from last year as a decline in revenues was more than offset by lower costs and expenses. However, earnings per share for the quarter missed analysts' expectations, while revenues beat their estimates.

In late February, Barnes & Noble said it plans to separate Barnes & Noble Education from Barnes & Noble's Retail and Nook Digital businesses. The company plans to spin off the college bookstore business into a separately traded company by the end of August 2015.

Barnes & Noble's third-quarter net earnings rose to $72.17 million or $0.93 per share from $63.23 million or $0.86 per share in the year-ago period.

On average, four analysts polled by Thomson-Reuters expected the company to report earnings of $1.23 per share for the quarter. Analysts' estimates typically exclude one-time items.

Sales for the quarter declined 2 percent to $1.96 billion from $2.00 billion in the same period last year. Analysts were looking for revenue of $1.92 billion for the quarter.

Barnes & Noble retail store sales, which consists of the Barnes & Noble bookstores and BN.com businesses, declined 1 percent for the quarter from last year to $1.40 billion. The sales decrease was attributable to lower sales of Nook products, leading to a comparable store sales decline of 0.3 percent for the quarter, as well as store closures.

Core comparable bookstore sales, which exclude sales of Nook products, increased 1.7 percent for the quarter on higher sales of both book and non-book categories.

Barnes & Noble College segment sales for the quarter rose 7 percent from last year to $521.02 million, reflecting new store growth and the benefit from a later shift in the fiscal calendar. However, comparable college store sales declined 1.4 percent.

The company's Nook segment, which includes devices, digital content and accessories, reported a 51 percent decline in revenue from last year to $77.51 million.

Device and accessories sales decreased 63 percent to $37 million, due to lower unit selling volume. Digital content sales declined 29 percent to $41 million, due primarily to lower device unit sales.

Looking ahead to fiscal 2015, Barnes & Noble affirmed its outlook for retail comparable bookstore sales to decline in the low-single digits, while retail core comparable bookstore sales are expected to be approximately flat.

Based on the better than expected comparable sales performance, the company now expects College comparable store sales to be approximately flat for the fiscal year. Earlier, the company forecast college comparable sales to decline in the low-single digits.

BKS is currently trading at $24.59, down $0.27 or 1.09 percent on a volume of 129,959 shares.