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Sales slide continues at Barnes & Noble


Barnes & Noble reduced its loss in its first quarter due to cost savings even as its sales continued to fall.

The company reported a net loss of $10.8 million for the quarter ended July 29, or 15 cents per share, compared to a loss of $14.4 million, or cents per share, for the year-ago period. Analysts had expected a loss of 12 cents a share.

"Our first quarter earnings results improved over the prior year, as we were able to mitigate the sales decline through expense reductions,” said Demos Parneros, CEO of Barnes & Noble, Inc. “We expect to improve our performance in the back-half of the year, which coupled with our focus on expense reduction, will enable us to achieve EBITDA of $180 million.”

Total sales fell 6.6% to $853 million, compared to analysts' forecasts for $873 million. Same- store sales decreased 4.9%, as declines in non-book categories outpaced improved book trends during the quarter. The company said also experienced lower online and Nook sales during the quarter, which were impacted by the prior year eBook settlement and lower promotional activity. Nook sales fell 28.1% in the quarter.

Neil Saunders, managing director of GlobalData Retail, commented that Nook's losses are a drag on the company resources, and it is time for the Barnes & Noble to scrap Nook and focus on developing a better online platform and apps to support its business.

"The company hails the [NOOK] ecosystem as an important component of its omnichannel strategy, but the fact the business is shrinking by so much demonstrates it is a very ineffective platform," said Saunders.

The analyst also criticized Barnes & Noble stores, especially its older locations, which he called "a hodgepodge of product with seemingly little coordination and thought given to the range of the product mix.

"As much as it is sensible to stock things like toys and games, there are lots of other places that sell these items -- often at lower prices," he said. "In essence, B&N needs to refine its non-book offer and work harder to create differentiation.” (Click here for more )

Barnes & Noble operates 632 bookstores in 50 states and an e-commerce site.
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