Barnes & Noble Q3 profit slips, ends Nook deal with Microsoft

New York – Consolidated net earnings dropped 8% at Barnes & Noble Inc. in the third quarter of fiscal 2015, to $12.3 million from $13.2 million. An increase in selling, general and administrative (SG&A) expenses helped drive the drop in profit.



Second quarter consolidated revenues decreased 3% to $1.69 billion from $1.75 billion.



Barnes & Noble announced it is terminating a deal it entered with Microsoft in 2012 to help support its struggling Nook e-reader business. The retailer will buy back Microsoft’s $300 million stake in Nook as part of the end of the agreement. Planned spinoff of Nook as a separate business may occur by August 2015. Revenue in the Nook segment dropped 41% in the third quarter.



“Retail and college (segments) improved their sales trends during the second quarter and Nook continued its rationalization efforts, while recently launching several initiatives to increase Nook users and content sales,” said Michael P. Huseby, CEO of Barnes & Noble.



“Retail sales continued to benefit from improving physical book industry trends coupled with our own merchandising initiatives, while our college bookstores same-store sales improved on favorable textbook sales trends and higher merchandise sales.”



For fiscal year 2015, Barnes & Noble continues to expect both retail same- bookstore sales and retail core same-bookstore sales to decline in the low-single digits. College same-store sales are also expected to decline in the low-single digits.