Bookseller Borders Group Inc. announced Tuesday that it widened its net loss in Q2 despite a sales boost from the seventh book in the Harry Potter series. The company posted a loss of $25.1 million ($0.43/share) versus a loss of $18.4 million ($0.29) in the year-ago quarter (see earnings call transcript). Excluding non-operating charges, the quarterly loss 
was -$0.26 per share. On that basis, analysts were expecting a loss of -$0.34. Revenue was up 10.4% to $945.1 million from $866.3 million versus analyst forecasts of $916.4 million. "Progress is clearly being made at Borders Group as we continue to execute our strategic plan and are beginning to see improved performance," said CEO George Jones. Activist investor Bill Ackman of Pershing Square Capital Management has been pushing Borders to sell assets and invest more in its stores. The chain is adding Paper Chase stationery stores to its locations and is converting its cafes to Seattle's Best, which is owned by Starbucks. Domestic Borders same-store sales rose 4.6% while those of Waldenbooks Specialty Retail stores went up 6.2%. International same-store sales gained 8.2%. Borders shares shed 5.79% to close at $14.80.
Sources: Dow Jones, Reuters, Forbes, Bloomberg,
Commentary: Borders Group: Spencer Raises Stake, and SAC Capital Discloses "Passive" Stake • Borders Group: Spencer Capital Accumulates 6.8% Stake, Discloses June Talks • Pershing Square Capital's William Ackman: Buys, Sells, Portfolio
Stocks/ETFs to watch: BGP. Competitors: AMZN, BKS, BAMM. ETFs: XLY, PEZ, VCR
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