Barnes & Noble sees smaller stores, more books in its future
In the wake of a wider quarterly loss than expected and a continuing sales slide, Barnes & Noble plans to a greater emphasis on what brought it the party in the first place: books.
Barnes & Noble’s sales in the second quarter fell 7.9% to $791.1 million. Same-store sales decreased 6.3%. But book sales are on the rise, the company said.
“Book sales continued to strengthen, and we saw improved traffic and conversion trends,” said Demos Parneros, CEO of Barnes & Noble. “As a result of the improving trends, we will continue to place a greater emphasis on books, while further narrowing our non-book assortment.”
Barnes & Noble has added more toys and games to its assortment. But its efforts have been met with falling sales. Its e-book business has also stalled.
Along with a renewed focus on books, the retailer is looking is smaller stores. Barnes & Noble stores average approximately 26,000 sq. ft. But its new store, in Plano, Texas, is less than half that, about 10,000 sq.ft.
“Our goal is to get smaller,” Parneros told analysts on the chain’s quarterly call. “We want to have smaller stores that are more efficient.”
The struggling retailer posted a consolidated second quarter net loss of $30.1 million, or $0.41 per share, compared to a loss of $20.4 million, or $0.29 per share, in the year-ago period. Analysts had expected a loss of 26 cents per share with approximately half of this decline attributable to last year’s release of Harry Potter and The Cursed Child, the company said, with the balance primarily due to non-book categories. It was Barnes & Noble’s 14th straight quarter of revenue decline.
“Comparable sales improved throughout the second quarter and into November,” For fiscal 2018, the company expects comparable sales to decline in the low single digits and full year consolidated EBITDA to be approximately $180 million. It expects comparable store sales to be approximately flat for the balance of the fiscal year. Additionally, it plans to reduce costs by $40 million for the full fiscal year.
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