Borders Sees Growth of 6% to 7% in 2004

Borders Group is the first of the book industry's major retailers to weigh in with a forecast for 2004. The company reported last week that it expects total sales in the year to increase between 6% to 7% over 2003. Total sales were $3.7 billion last year, an increase of 6.1% from 2002.

Borders will be relying more in 2004 on increasing sales from existing stores than on store expansion for growth; its projections call for opening only 18 to 20 domestic superstores this year, compared to 41 new superstores in 2003. It is projecting that comparable-store sales for superstores will increase in the low single digits compared to same-store sales growth of 0.5% last year.

Same-store sales at Waldenbooks, which fell 0.6%, last year, are expected to be flat this year, and the company plans to shut between 30 to 40 outlets. International sales are expected to increase by about 20% next year, and Borders will open six or seven stores overseas. Borders had international sales of $407.5 million last year. Earnings per share for the company are projected to increase 12% to 15% this year.

In reviewing 2003, Borders reported that a strong fourth quarter helped to lift sales for the year. Fourth-quarter sales were up 7.5%, to $1.3 billion, led by an 8.9% sales increase at superstores, to $827 million. Fourth-quarter sales at Walden fell 2.5%, to $340.4 million, and international sales increased 28.8%, to $145 million.

For the full year, sales at superstores increased 6.5%, to $2.47 billion, while sales at Walden decreased 3.7%, to $820.9 million.

Borders Group Sales, 2002—2003
($ in millions)