Borders Group reported net income of $111.7 million for the fiscal year ended January 26, 2003, a 27.8% increase over the previous year. Excluding unusual items, operating earnings rose 7%, to $117 million. The earnings increase came on a 2.9% revenue gain, to $3.51 billion.
Accompanying the earnings announcement, Borders said that it plans to open 35 to 40 domestic superstores in 2003 and six to eight international stores, while closing 40 to 50 Waldenbook outlets. The store plans are in keeping with Borders's past actions. In 2002, it opened 41 superstores, finishing the year with 404 outlets, while it closed 53 Waldenbook stores and opened four, leaving the company with 778 mall stores. Eight new stores were opened overseas; the company's international store count stands at 30 superstores and 37 Books etc.
Borders' outlook for 2003 was cautious. It said the comparable-store sales at its superstores and Walden divisions to date "reflect a continuation of fourth-quarter 2002 results [when comp sales fell 3% and 6.1%, respectively], plus the added impact of weather disruptions."
Despite the slow start, Borders said it expects earnings per share in the first quarter to be about even with last year and that for all of 2003, it is projecting a 5% to 12% increase in earnings per share. The chain reiterated its belief that the business will begin to improve in the second half of the year.
