Sales fell slightly less than expected in the first quarter ended May 2 at Barnes & Noble, declining 4%, to $1.11 billion. Sales at its bookstores fell 3.5%, to $989 million, as same store sales dropped 5.7%. The retailer had expected a decline in comp sales of between 6% and 9%. Sales at Barnes & Noble.com fell 7%, to $93 million. The net loss from continuing operations was $2.1 million compared to a loss of $566,000 in last year’s first quarter. The loss was less than anticipated, something B&N attributed to higher than expected sales, improved gross margins and cost cutting.
In a conference call, executives said store traffic was down, while sales per customer dipped slightly. CFO Joseph Lombardi said April was the best month of the quarter, helped by Easter, but comp sales were still down. The slight improvement in April has carried into May. Sales of bestsellers had an "uptick" in the period, Lombardi said, particularly nonfiction. CEO Steve Riggio said the decline at B&N.com was due to lower conversion rates of visitors to the site. Traffic was up in the quarter and Riggio said B&N is working on upgrades to the site that should be ready by the second half of the year. Riggio said B&N "is aware" of the growing competition in the digital area and said B&N sees digital content as a large growth area, beyond just selling e-books. Although he gave no specifics, Riggio said the B&N, which recently bought Fictionwise, is working on new ways for customers to buy content.
Although the company expects second quarter comp sales to fall between 5% and 7%, it has changed its forecast for the full year, projecting same store sales to drop between 3% and 5% compared to an earlier forecast of a 4% to 6% drop. Earnings are also expected to be better than originally forecast. The company also announced that is will close 15 superstores this year, up from its previous forecast of 10. It closed six and opened six superstores in the quarter, while closing one Dalton.
