By Leena Rao
Barnes and Noble (BKS) reported earnings this morning, with total sales increasing 5% compared to the prior year, from $2.3 billion to $2.4 billion, falling short of analyst expectations. Net income was $52 million, which is flat with the previous year’s earnings. Third quarter earnings per share was $0.71; missing analyst expectations of $1.01 per share.
The company said retail sales in general increased 2% from $1.46 billion to $1.49 billion. BN.com sales increased 32% over the prior year, from $319 million to $420 million. Comparable sales increased 42%, on top of a 64% increase a year ago. This increase was driven by continued growth of NOOK device and digital content sales, offset by a decline in online physical product sales.
The NOOK business across all of the company’s segments, including sales of digital content, device hardware and related accessories, increased 38% during the third quarter to $542 million. NOOK unit sales, including NOOK Simple Touch, NOOK Color and the new NOOK Tablet, increased 64% during the third quarter as compared to the same period last year. Digital content sales increased 85% on a comparable basis.
B&N previously stated that Nook Tablet “exceeded expectations” over the holidays, with device sales up 70 percent. As a whole, today’s earnings were not stellar considering that this is supposed to be the company’s high season for sales because of the holidays.
Barnes & Noble College sales declined 3% from $540 million to $525 million, due to the shift from selling new and used textbooks to lower priced textbook rentals.
As reported yesterday, Barnes & Noble also stated that it would release a new 8GB version of the Nook Tablet, which is priced at $199.