Barnes & Noble Company Earnings Have Evaporated

The bookstore chain reported a quarterly diluted earnings per share (EPS) loss of $2.11 on revenues of $1.28 billion. In the same period a year ago, B&N reported a net loss of $1.06 per share on revenue of $1.38 billion. Fourth-quarter results also compare to the Thomson Reuters consensus estimates for a net loss of $0.99 per share and $1.33 billion in revenue.

For the full fiscal year, B&N posted a net loss of $2.97 per share on revenues of $6.84 billion, compared with a loss of $1.35 per share in 2012 on revenues of $7.13 billion. The consensus estimates called for an EPS loss of $2.01 on revenues of $6.86 billion.

B&N noted that it is currently “evaluating certain prior year amounts, which may result in a revision to the financial statements.” That is never good news, but the company also said that it does not believe that the amounts will be “material to the financial statements.”

The company’s CEO said:

Our Retail and College businesses delivered strong financial performances in fiscal year 2013. We are taking big steps to reduce the losses in the NOOK segment, as we move to a partner-centric model in tablets and reduce overhead costs. We plan to continue to innovate in the single purpose black-and-white eReader category … .

Perhaps the folks at B&N did not get the memo that single-purpose e-reader sales are shortly to begin declining as smaller, more versatile tablets get cheaper. E-reader sales have been projected to rise in 2013, but the increase is only temporary.

B&N took a non-cash goodwill impairment charge of $18.3 million in its Nook reporting unit during the fourth quarter and an inventory charge of $133 million as the company “adopted more aggressive promotional strategies” for its e-reader.

In its retail segment, B&N said that same-store sales were flat for the full year, but total sales were down 10% for the quarter and 5.9% for the year. Revenues in the company’s college segment rose 10.7% in the quarter and 1.1% for the year.

B&N’s shares are down about 8.3% in premarket trading this morning, at $18.82 in a 52-week range of $11.17 to $23.71. Thomson Reuters had a consensus analyst price target of around $17.80 before today’s results were announced.