Seeking Alpha

Not much to like from Barnes & Noble

  • Barnes & Noble (BKS) shows another quarter of deteriorating revenue trends across segments.
  • FQ2 segment revenue: Retail -7.5% Y/Y to $921M; College -4.6% to $737.5M; Nook -32.2% to $108.7M.
  • Perhaps the most alarming nugget from the quarter: Digital content sales fell 21.2% Y/Y vs. -16% last quarter.
  • The company did manage to back its previous guidance. (PR)
  • BKS -3.3% premarket.
Comments (1)
  • glenmoody
    , contributor
    Comments (30) | Send Message
     
    As an industry insider, I am shocked that BN showed any profit at all. I think this is a vast improvement for them; I know because of the AMZ syndrome that watchers of book stocks tend to expect higher revenue with no profit, folks tend to think that increased sales regardless of profit are the answer to everthing. But, the news is they actually made money and that is the point of business; in this economic climate it is virtually unheard of.

     

    The main problem for BN earnings right now is the stranglehold of the Riggio clan. When you drill through the data you will find that Len gets a piece of everything BN does throughout the layers of the company, from owning the delivery services, a middle company that everything is purchased through, etc. Only when he loosens his hold on that aspect of the company will it ever be worth anything.

     

    Another big factor in the book business this week is the catastrophic failure of a million dollar piece of hardware at Alibris this week, which has brought much of the online used (and new) business to a halt, affecting tens of thousands of significant sellers who also sell to nearly 35 other national b&m and online sellers, including BN. The entire Alibris system (for sellers) was down for over a week in a peak selling time.

     

    The future of ebooks is not owned by Amz and BN, but by Apple via their ipad. Declining electronic book sales for BN is actually a good thing so they can concentrate on selling actual products. If their deal with Starbucks changed, that could hurt the retail stores significantly.
    26 Nov 2013, 09:44 AM Reply Like
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