To help boost sales after a poor fiscal year, Books-A-Million said in its year-end filing with the Securities and Exchange Commission that it plans to "reinvigorate our proprietary publishing efforts and our import program to bring good value and unique books and gifts to our customers." The final results for Books-A-Million for the year ended February 1, 2003, showed a decline in net income to $1.4 million from $3.9 million in fiscal 2002, on virtually flat sales of $442.7 million.
BAM had delayed the release of its final figures until results from the past several years were re-audited to reflect the way the company now accounts for revenue from its Millionaire's Club (News, Apr. 7). The after-tax reduction to earnings in fiscal '03 was $21,000, while earnings were reduced by $66,000 and $86,000 in fiscal 2002 and 2001, respectively. Income in fiscal '03 was also reduced by a $1.2-million charge to reflect a separate change in BAM's accounting methods.
Re-crunching the numbers doesn't hide the fact that BAM had a poor fiscal '03, which company chairman Clyde Anderson acknowledged in his annual letter to shareholders. Anderson noted that "overall, we were disappointed in our earnings results. We had clearly expected and hoped to do better." Anderson said a weakened economy, the underperformance of key titles and consumer caution "combined to make an already competitive landscape even more challenging."
BAM's book sales were particularly weak in the fourth quarter when same-store sales fell 7% for all book categories compared to 4.9% for the entire store. For the year, same-store sales were down 1.2% for the book category and off 2.6% for the entire store. The weakest-performing book segment was bargain books, and BAM is reducing the space allocated to those titles. It's also cutting back its music and greeting card sections. Book categories that showed gains in the year were led by cooking, home design and diet and health.
According to the company's year-end filing, BAM's retail sales rose 0.3% last year, to $437.3 million, while sales in its e-commerce business increased 4.6%, to $23.3 million. (Sales for the two segments total more than $442.7 million because of $18 million in intercompany sales.) During the year, BAM opened six new superstores, raising the number of superstores to 163, while closing three traditional stores, which dropped the number of those outlets to 37. The company also remodeled 57 stores. In the current year, BAM plans to open six to eight new stores, remodel 20 to 25 outlets and close two to four stores.
