Barnes & Nobles Swings to Profit, Raises Outlook

Barnes & Nobles reported a third-quarter profit Tuesday and raised its full-year outlook. Net income came in at $4.4 million ($0.07/share) compared to a loss of $2.8 million ($0.04/share) last year. Excluding certain items, the company lost $0.02/share, still beating analysts' forecasts of a loss of $0.08/share. Revenue climbed 5.7% to $1.2 billion, also beating analysts' targets of $1.15 billion. Same-store sales rose 2.6%. "Sales continued to perform at the higher end of expectations, due in part to strong sales of new releases and bestsellers, which combined with a better-than-expected gross margin rate enabled the company to outperform its third-quarter earnings expectations," said Chief ExecutiveSteve Riggio (full earnings call transcript later today).

Looking ahead, the company raised its same-store sales projections to low-single digit growth from flat to slightly positive growth. In the fourth quarter, the company expects to earn $1.67-$1.86/share; analysts at Thomson project $1.72/share. Also, the company raised its full-year outlook, based on strong third-quarter results, fewer shares outstanding, and higher sales expected in the fourth quarter. It now sees full-year earnings ranging between $1.91-$2.09/share, up from $1.75 to $1.89/share. "Small-ticket book purchases are generally under less consumer pressure versus large-ticket household durables," Stifel Nicolaus analyst David Schick wrote on Nov. 15. Bestselling titles during the quarter included Alan Greenspan's The Age of Turbulence, John Grisham's Playing for Pizza, Ken Follett's World Without End, Nicholas Sparks's The Choice and Stephen Colbert's I Am America (And So Can You!). Shares were up 7% to $34.93 in midday trading.

Sources: Press release, MarketWatch, Wall Street Journal, Bloomberg
Commentary: Piggybacking on Riggio: Insider Buying at Barnes & Noble • Barnes & Noble: Is Riggio's Latest Buying Spree Something To Read Into?
Stocks to watch: BKS. Competitors: AMZN, BGP. ETFs: PMR, XRT
Earnings call transcript: Barnes & Noble F2Q07 (Qtr End 8/4/07)

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Comments

[DanielJacome]

Riggio has been buying stock all this time, BKS goes higher and insiders are showing is with their wallets