Barnes & Noble reported this morning that 2016 holiday sales came in below expectations, with comparable store sales down 9.1% in the nine-week period ended December 31, 2016 compared to a year ago.
The retailer attributed the decline to lower store traffic as well as to a decrease in adult coloring books and supplies. In addition, last year Adele's album was the best-selling CD in B&N history. The company said the drop in coloring books and the comparison to Adele's album accounted for one-third of the sales decline. Book sales outperformed the company as a whole.
B&N—as well as much of the retailing sector—had been experiencing weak customer traffic for the year, which B&N CEO Len Riggio attributed to the distraction caused by the election. Riggio had hoped traffic would improve once the election was over. While traffic did not improve significantly before the end of the holiday, Riggio said store traffic and sales have improved after the end of the holidays.
A bright spot for the retailer was BN.com, where sales rose 2% over the holidays.
Despite the softer than expected sales, B&N still expects operating profits to be up for the full fiscal year, which ends in April—although the increase will be at the lower end of its previous forecast. Total EBITDA (earnings before interest, taxes, depreciation, and amortization) is now expected to be $200 million, with retail EBITDA forecast to be $225 million. The Nook segment is expected to post an EBITDA loss of $25 million.
Comparable store sales are now expected to finish the year down 6%.
