Thursday, Borders Group, Inc. (BGP) a books and music superstores operator, reported a loss in the fourth quarter compared to a profit last year, on higher expenses and cost. The company sees the full-year 2007 as a period of transition, positioning Borders Group to return to growth in 2008 and beyond, with the execution of the strategic plan.The Ann Arbor, Michigan based company's consolidated fourth quarter GAAP net loss was $73.6 million or $1.25 per basic share, compared to GAAP net income of $119.1 million or $1.78 per share in the same quarter of 2005. On an operating basis, fourth quarter consolidated net income declined 24.2% to $94.8 million from $125.0 million a year ago. Excluding non-operating charges, primarily comprised of asset write-offs, the company reported fourth quarter consolidated earnings per share of $1.61, compared to operating consolidated earnings per share of $1.87 last year.On average, seven analysts polled by First Call/Thomson Financial estimated earnings of $1.63 per share for the quarter.The company achieved quarterly consolidated sales of $1,496.3 million, an increase of 2.9% over $1,454.7 million in 2005. Total revenues for the quarter reached $1.52 billion, compared to $1.48 billion in the previous year. Wall Street expected revenues of $1.48 billion. For the fourth quarter, total sales in the International segment were $249.6 million, up 22.5% over a year ago and domestic Borders superstores rose 2.3% to $960.3 million from the same quarter in 2005.In the fourth quarter Gross margin as a percent of sales, on a GAAP basis, declined by 3.0% to 30.6% from 33.6% last year, on increased promotional discounts related to customer redemption of Borders Rewards benefits, de-leveraging of fixed occupancy costs, and non-operating charges. Quarterly gross margin was $457.7 million, compared to $488.9 million in the previous year.On a GAAP basis, Borders Group's SG&A as a percent of sales increased by 0.6% to 20.3% in the fourth quarter from 19.7% a year ago, primarily due to de-leveraging of expenses and non-operating charges. SG&A expenses increased to $303.7 million from $287.3 million last year.For the full year 2006, Borders Group posted a net loss of $151.3 million, compared to a profit of $101.0 million in the prior year. The company reported consolidated loss of $2.44 per basic share for the year, compared to consolidated earnings per share of $1.42 for the prior year. On an operating basis, the full year consolidated earnings per share were $0.39, compared to $1.57 consolidated earnings per share in 2005.Moving forward, the company said it expects that 2007 will be a year of transforming and stabilizing but not significantly improve the financial performance. Through execution of its strategic plan, management anticipates returning to earnings per share growth in 2008, and continued growth beyond that year based on achievement of these long-term financial targets.In a separate release, the company presented its long-term strategic plan to focus on core domestic superstore business. The plan includes new proprietary Borders.com e-commerce site in early 2008, strategic alternatives for international segment, and continued right sizing of Waldenbooks.BGP closed Wednesday's regular trading session at $21.43, up $0.27, on a volume of 840K shares.
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December 19, 2025 15:10 ET U.S. inflation data and interest rate decisions by major central banks were the highlights of this busy week for economics news flow. Employment data and survey results on the housing markets also gained attention in the U.S. In Europe, the European Central Bank and Bank of England announced their policy decisions and macroeconomic projections.