{"id":644508,"date":"2013-02-28T08:58:50","date_gmt":"2013-02-28T13:58:50","guid":{"rendered":"http:\/\/paidcontent.org\/?p=225257"},"modified":"2013-02-28T08:58:50","modified_gmt":"2013-02-28T13:58:50","slug":"as-nook-revenues-plunge-bn-says-its-calibrating-strategy-but-committed-to-devices","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/644508","title":{"rendered":"As Nook revenues plunge, B&N says it’s “calibrating” strategy but “committed” to devices"},"content":{"rendered":"

Barnes & Noble had warned investors that its third-quarter Nook earnings would be disappointing<\/a>. The earnings report<\/a> was released before the market opened Thursday morning, and indeed, Nook revenues — consisting of devices and digital content — were down 26 percent, to $316 million, despite the fact that Barnes \u00a0& Noble released two new tablets<\/a> during the year. The company attributed the decline primarily to lower device sales. Digital content sales rose slightly, by 6.8 percent. Nook EBITDA losses were $190 million, compared to $83 million a year ago.<\/p>\n

The company’s overall revenues for the third quarter of fiscal year 2013 were $2.2 billion, down 8.8 percent over last year. The company saw losses of $6.1 million, or -$0.18 per share, compared to earnings of $0.71 per share a year ago.<\/p>\n

Today’s earnings come a few days after B&N’s founder, chairman and largest stockholder, Leonard Riggio,\u00a0offered to buy<\/a>\u00a0the chain’s 689 retail stores and take them private.\u00a0So how are those stores doing? Not well, but not as badly as Nook is doing. Over the holidays, Barnes & Noble bookstore chain\u00a0saw sales down<\/a>\u00a0at its physical stores and at BN.com as well as in the Nook segment. For the quarter, retail sales were $1.5 billion, down 10.3 percent over last year, “attributable to a 7.3% decline in comparable store sales, store closures and lower online sales.” Core comparable store sales were down 2.2 percent. The company did not break out sales at BN.com.<\/p>\n

In response to the problems at Nook, Barnes & Noble said in the earnings release that Nook “is calibrating its business model and has implemented a cost reduction program that the company projects will significantly reduce Nook’s expenses.” As a reminder, Nook is the segment of the business that’s supposed to be doing well: Barnes & Noble spun it off, along with the college bookstores, into a subsidiary called Nook Media last year, with investments from Microsoft and Pearson. For fiscal year 2013, the company said it expects Nook Media revenues to be $2.5 billion. Previously, it had estimated revenues of $3 billion for the segment.<\/p>\n

In a statement, B&N CEO William Lynch said the company has “taken significant actions to begin to right size our cost structure in the Nook segment, while also taking a large markdown on Nook devices in order to enhance our ability to achieve our estimated sales plans in subsequent quarters.” Lynch said Nook “remains committed” to the tablet and e-reader business, likely in response to a New York Times<\/i>\u00a0article earlier this week that cited an unidentified source<\/a> who said Barnes & Noble would “move away” from building devices.<\/p>\n

Lynch also said, “Without question, our bookstores have made a significant contribution to Nook\u2019s success over the past three years. And, in turn, our award-winning line of Nook’s products have proven to be a strong driver of traffic to our stores.”<\/p>\n

Barnes & Noble is holding an investor call at 10 a.m. ET, and we will be on the call.<\/p>\n

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