The first half of this year was one of the softest periods in recent memory in the book industry in terms of hardcover new releases," said Barnes & Noble CEO Steven Riggio, explaining why the latest six-month sales at the retailer were flat with 2005, at $2.27 billion. Compared to last July's publication of Harry Potter and the Half-Blood Prince, no new release generated much media buzz, Riggio told analysts in a conference call discussing results for the second quarter ended July 29. While bestseller sales were soft, backlist was strong, Riggio noted.
Sandra Cochran, president of Books-A-Million, also cited the lack of Potter for the 0.7% decline in second-quarter sales at BAM, where revenue was $121.2 million. Earnings rose 44%, to $2.4 million. Cochran said BAM was able to offset some of the lost Potter sales with strong increases in Bibles and Christian fiction; gains in the graphic novel category; and higher sales in fiction, led by paperback editions of The Da Vinci Code.
Both Riggio and BAM said the lineup for new titles is much stronger in the second half of the year than it was in the first six months. Riggio is looking forward to the October release of John Grisham's TheInnocent Man, which he called "one of the most eagerly anticipated books in a long time." He was also high on the forthcoming U2 book and Mitch Albom's For One More Day. Riggio observed that books on current affairs, war and politics "will be abundant" this fall, and he was enthusiastic about a strong cookbook release schedule topped by the new edition of Joy of Cooking. Cochran was also expecting strong sales for For One More Day as well as for the final installment in the Lemony Snicket series.
Looking at B&N's second quarter, total sales fell 1.2%, to $1.16 billion, with sales at the company's superstores flat at $1 billion. Sales from new stores were not enough to offset a 2.6% decline in comp-store sales. Dalton sales fell 31%, to $21.9 million, due to closings and a 9.1% decline in comp sales. Sales at Barnes & Noble.com dropped 14%, mostly due to strong sales last year of Potter and related merchandise.
There were only a few analysts' questions about the second quarter, but two dealt with B&N.com's performance compared to that of Amazon.com. B&N.com head Marie Toulantis said it was unfair to compare B&N.com to Amazon's media group (where sales in the second quarter increased 16%) because Amazon sells an array of products while B&N.com focuses on books. Toulantis said that B&N.com has no immediate plans to change some of the e-tailer's practices, such as shipping fees, to compete with moves Amazon has made (such as Amazon Prime), although she noted that the company continues to review its shipping and discount offers. Full-year sales at B&N. com are expected to be flat to up in low single digits.
Cochran said BAM's expansion plans for the rest of the year will be confined to states where it already has stores; it added Kansas earlier this year, giving the chain a presence in 20 states plus Washington, D.C. Cochran did say that BAM was looking at adding stores at the edges of its territory, including sites in west Texas.
