Barnes & Noble sales drop despite red-hot Nook demand
Though its Nook e-readers are clearly popular, B&N still reported a net loss and lower overall revenue for its fiscal second quarter.
Strong Nook sales weren't quite enough to stem a net loss and slightly lower revenue that hit Barnes & Noble in its second quarter.
The bookseller was helped by higher sales of its Nook e-readers as well as the liquidation of the remaining stores of former rival Borders. Revenue from the company's BN.com Web site grew 17 percent over the prior year's quarter, reaching $206 million from $177 million. B&N attributed the gain to sales of Nook devices and digital content. Comparable sales across the entire Nook business jumped 85 percent in the second quarter, reaching $220 million.
Though not counted in the latest quarter that ended October, the new Nook tablet is off to a healthy start, with the company pegging it the fastest-selling Nook product in its history. Officially launched on November 7, the new tablet has garnered positive reviews so far.
But sales of physical books continued to drop over the second quarter. Retail store sales inched down 1 percent to $918 million from $931 million. Revenue from B&N's college division fell 4 percent due to a shift in strategy from selling new and used textbooks to offering rentals of lower-priced textbooks.
For the quarter, the company's overall sales dipped to $1.89 billion from $1.9 billion previously. Its net loss was cut in half to $6.6 million, or $17 cents per share, from 12.6 million a year ago.
But the results disappointed Wall Street analysts, who were anticpating sales of $1.98 billion and a profit of 3 cents a share, according to the Wall Street Journal (subscription required).
Looking ahead, B&N is expecting better results for the current quarter and beyond, thanks in part to the new Nook tablet and enhancements to the Nook Color and Nook Simple Touch.
"We expect to sell millions of devices during our third quarter, adding to the millions of current Nook customers," Barnes & Noble CEO William Lynch said in a statement. "This growing base of customers buying digital content from Barnes & Noble will continue to position us as one of the fastest growing companies in this exploding digital content market, and we project this will generate significant returns on our investments for years to come."