Bookstore chain Barnes & Noble, Inc. (BKS) on Tuesday reported a loss for the fourth quarter that narrowed from last year on lower costs as well as interest expenses. However, loss per share widened from last year.
Retail sales edged up, while Nook segment sales declined 11 percent. The company's shares are down almost 6 percent in the regular session.
Barnes & Noble also announced that it recently completed the evaluation of its reporting segments and will now report results for a separate 'Nook' operating segment.
In early January, Barnes & Noble said it will explore strategic alternatives for the Nook digital business. The company is looking to spinoff the Nook business into a separate company in order to unlock its value due to the increased significance of the Nook business platform.
Microsoft Corp. (MSFT) said in late April that it is making a $300 million investment in the newly formed unit of Barnes & Noble that includes the digital and college businesses of Barnes & Noble as well as a new Nook application for Windows 8.
Barnes & Noble retail store sales for the latest quarter edged up 0.5 percent. Comparable store sales grew 4.5 percent, benefiting from the liquidation of Borders' bookstores during fiscal 2012, increased sales of Nook products, and a strong title lineup. The retail segment includes results from the Barnes & Noble bookstores and BN.com.
Barnes & Noble College sales grew 5.7 percent, while comparable store sales declined 2.2 percent. Sales were positively impacted by the recognition of textbook rental sales deferred from the third quarter.
Sales at the Nook segment, which consists of the company's digital business, declined 11 percent to $164 million. Comparable sales for the segment rose 1 percent.
Device sales declined due to higher third-party channel partner returns, lower selling volume and lower average selling prices. In order to optimize the supply chain for new products, the company took back Nook Simple Touch inventory following a holiday sales shortfall.
Meanwhile, digital content sales grew 65 percent on a comparable basis.
The company's fourth-quarter net loss narrowed to $57.73 million from $59.42 million in the year-ago period. However, loss per share widened to $1.08 from $1.04 in the prior-year quarter, reflecting the inclusion of $4 million in accrual of preferred stock dividends.
In the latest quarter, the company recorded a $5.9 million compensation-related permanent tax difference charge related to the prior periods, which reduced earnings per share by $0.10.
On average, six analysts polled by Thomson Reuters expected loss of $0.93 per share for the quarter. Analysts' estimates typically exclude special items.
Consolidate revenues edged up 0.4 percent to $1.38 billion from $1.37 billion in the same period last year, but missed analysts' consensus estimate of $1.48 billion.
In Tuesday's regular session, BKS is trading at $14.21, down $1.03 or 6.76 percent on a volume of 23,111 shares.
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