A 35% reduction in operating expenses, to $44.3 million, helped Barnes & Noble.com cut its net loss in the first quarter ended March 31, 2002, to $20.5 million from $39.8 million in the comparable quarter in 2001. Sales in the period were $106.5 million, down from $109.4 million. Revenue from last year's first quarter, however, included $3.5 million in sales from Fatbrain's two retail stores that were closed in the fourth quarter as well as from product lines, such as computer software, that BN.com no longer offers.
Sales in BN.com's core Internet business were led by a 15.4% increase in the consumer market, which was partially offset by a decline in sales to corporate customers. The improved consumer sales were attributed in part to the company's shipping policy, which gives customers free shipping when they order at least two items.
Among the costs BN.com has been able to trim are its agreements with such marketing partners as AOL, Yahoo and MSN. Although the company has new agreements with those companies, the deals are on much more favorable terms, according to chief financial officer Kevin Frain. BN.com also has been able to get better terms from its technical service providers.
As a result of its various efforts, BN.com expects losses to fall for the balance of the year, although the company is still forecasting a net loss for the year in the 52 cents to 55 cents per share range. Total revenues for the year are still forecasted to be between $400 million to $450 million (sales in 2001 were $404.6 million). Sales in the second quarter are projected to be between $80 million and $85 million, compared to sales of $83.7 million in last year's second quarter.
