Barnes & Noble (NYSE: BKS) released fiscal second-quarter 2017 results Tuesday morning, and shares of the retail bookseller jumped more than 11% on the day as a result. Let's dig in to see what drove Barnes & Noble's strong showing as it gets ready for the lucrative holiday season.
Barnes & Noble results: The raw numbers
Fiscal Q2 2017
Fiscal Q2 2016
Net income (loss) from continuing operations
EPS (loss) from continuing operations
Data source: Barnes & Noble.
What happened with Barnes & Noble this quarter?
- By comparison -- and while we don't usually pay close attention to Wall Street's near-term expectations -- consensus estimates called for a larger loss of $0.34 per share on higher revenue of $859.8 million.
- Earnings before interest, taxes, depreciation, and amortization (EBITDA) was $0.7 million, compared with an EBITDA loss of $20.5 million in last year's fiscal Q2. This included:
- Retail EBITDA of $3.5 million.
- Nook segment EBITDA losses of $2.7 million.
- Retail sales (including BN.com) declined 3.5% year over year, to $830.7 million.
- Comparable-store sales declined 3.2% because of lower store traffic, offset by a boost from the release of Harry Potter and the Cursed Child.
- Nook sales (including digital content, devices, and accessories) fell 19.4% year over year, to $35 million.
- The company returned $21 million in cash to shareholders this quarter, including $11 million in dividends, and 878,000 shares repurchased for roughly $10 million, or $11.44 per share.
What management had to say
Last quarter, Barnes & Noble CFO Allen Lindstrom suggested that store traffic and sales trends were
Assuming that happens, Barnes & Noble continues to expect that fiscal 2017 comparable-store sales will decline in the low-single-digit range, and -- thanks to its cost-savings initiatives -- full-year EBITDA should still be in the range of $200 million to $250 million. That range assumes that EBITDA losses of $30 million to $40 million from the Nook segment will be more than offset by positive retail EBITDA of $240 million to $280 million. The latter range excludes charges related to both its cost-reduction initiatives and the recent
In the end, Barnes & Noble still has plenty of work to do. But it seems to be enough that it took steps in the right direction and enters the holiday season with a renewed sense of optimism. With shares having nearly doubled from their 52-week lows but still down slightly over the past year, it's hard to blame investors for bidding Barnes & Noble stock up today.
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