Executives at both Borders Group and Books-A-Million expressed cautious optimism about prospects for fourth-quarter sales in conference calls with analysts made in conjunction with the release of third-quarter results.

Borders CEO Greg Josefowicz said he expects to see "positive results" in the quarter, and said he was fairly confident that the company's mix of books, music and related items would appeal to consumers looking for reasonably priced gifts. He said that comparable-store sales over the last two weeks were up 1.5% at superstores and estimated that same store superstore sales would be in the -1.0% to -2.0% range in the fourth quarter. Comparable superstore sales at Waldenbooks were down 4.0% in the last two weeks, and projections call for a decline of 4.0% to 5.0% in the period. Company chief financial officer Ed Wilhelm said the early improvement in fourth-quarter sales was due to higher foot traffic compared to last year, as well as improvement in the sales of bestsellers. The decline in bestseller sales, especially in fiction, was cited as a major factor in limiting gains in the third quarter. In addition to better bestseller sales, Josefowicz said sales were up in the cooking, history, religion and entertainment categories, as well as in the children's segment, DVD and gift and stationery lines.

Books-A-Million chairman Clyde Anderson noted that major titles "are starting to do what we thought they would" after a disappointing performance in the third quarter. He observed that Desecration has done very well since its release in late October, and John Grisham's Skipping Christmas has done better than expected. He also has high hopes for the Jack Welch and Tiger Woods books and "everything to do with Harry Potter."

Anderson said he was "feeling pretty good about the book business" and was looking forward to a good fourth quarter. Moreover, trends are favorable enough that BAM said it still expects earnings per share in the fourth quarter to be in the 36-40 cent range, compared to 27 cents in last year's fourth quarter.

In reviewing third-quarter results for the quarter ended November 3, BAM reported that sales rose 8.5%, to $97.8 million, and the company's net loss increased to $1.9 million from $1.6 million. Comparable-store sales were off 3.8% in the period; excluding the effects of collectibles sales--which benefited from strong Pokémon sales last year--same-store sales were down 2.0%.

Anderson explained that while the company's book business had a "dramatic downturn" in the days immediately after September 11, sales of magazines were "way up" and newspaper sales showed good gains. A wide range of patriotic items also sold well, including a special calendar published by BAM.

Total sales at Borders rose 1.8% in the quarter, to $713.7 million, and its net loss was $3.1 million, compared to $5 million in last year's third quarter. Sales in its Borders segment, which includes superstores plus Borders.com, rose 3.5%, to $480.6 million, with superstore sales ahead 5.1%. Comparable-store sales were down 0.2%. Sales at Waldenbooks fell 6.2%, to $173.8 million, with same-store sales off 4.1%. Borders's international stores, which were the least affected by the events of September 11, had a sales increase of 15.1% in the quarter, to $59.3 million.