New York – Barnes & Noble swung from a net loss in the third quarter of fiscal 2013 to a net profit in the third quarter of fiscal 2014, even as revenues dropped.
Net earnings in the third quarter totaled $63.2 million, compared to a $3.7 million net loss in the same period a year earlier. Total revenues dropped 10.3% to $1.99 billion from $2.22 billion. A 50% revenue drop in the company’s Nook segment helped drive the overall decline, although all the company’s retail and college verticals also reported revenue drops.
Despite the decline in Nook revenue, Barnes & Noble said it is negotiating with several hardware partners and plans to release a new color Nook device in early fiscal 2015.
Michael P. Huseby, CEO of Barnes & Noble, said good titles, textbook rentals and a clearing out of Nook inventory helped produce a profit.
“During the third quarter, the company significantly improved its balance sheet and bottom line, while making real progress on our strategic priorities,” said Huseby. “Retail’s core same-store store sales benefited from a strong title line-up, strong execution and an effective advertising campaign. College entered into the spring back-to-school rush and saw continued growth in its higher-margin textbook rental business. Nook losses narrowed significantly as we achieved our objective of selling through much of our pre-holiday device inventory, while managing promotions to optimize sales.”
The company reaffirmed its previously issued full-year guidance, in which it expects retail same-store sales to decline in the high single digits, core retail same-bookstore sales to decline in the low- to mid-single digits and college same-store sales to decline in the low single digits.