Bookseller Barnes & Noble Inc. (BKS, Financial) reported its fiscal fourth-quarter and full-year 2017 earnings on June 22, posting a narrower loss compared to the previous year due to lower costs and expenses.
The company recorded a quarterly net loss of $13.4 million, or 19 cents per share, an improvement from $30.61 million, or 42 cents per share, in the comparable quarter of 2016. The company also beat analyst expectations, which was a loss of 23 cents.
Barnes & Noble CEO Demos Parneros commented on the company’s performance and highlighted its goals for 2018.
"While fiscal 2017 proved to be a challenging year for the company, we reduced costs by $137 million, enabling us to sustain our profitability level," Parneros said. "In fiscal 2018, we are focusing on ways to improve the business and reignite sales through an aggressive test and learn process and companywide simplification process that will take out costs."
Total sales for the quarter declined 6.3% from the prior-year quarter to $821 million. For the year, total sales came in at $3.9 billion, down 6.5% from fiscal 2016. Comparable store sales fell 6.3% for both the quarter and the year while online sales grew 2.9% for the quarter and 3.7% for the year.
For the fourth quarter, Barnes and Noble’s retail segment generated an operating loss of $15.9 million, and Nook reported an operating loss of $7.9 million for a total operating loss of $23.8 million.
For the year, the bookstore reported $22 million in net earnings from continuing operations, an improvement from $14.7 million in 2016. Although the retail segment generated $90.7 million in operating income during the year, Nook reported an operating loss of $36.4 million. Total operating income for the year was $54.3 million.
Barnes & Noble reported its consolidated earnings before interest, tax, depreciation and amortization (EBITDA) for the year was $187.2 million, in line with the guidance of $180 million to $190 million and an improvement from the previous year’s EBITDA of $185.7 million.
The company ended fiscal 2017 with $64.9 million in debt under its $750 million credit facility.
For 2018, Barnes & Noble guided a low single-digit decline in comparable store sales and full-year EBITDA to be near $180 million.
After the announcement, shares rose 7.7% to $7. With a market cap of $504.4 million, the stock was trading with a price-earnings (P/E) ratio of 176.25, a price-book (P/B) ratio of 0.88 and a price-sales (P/S) ratio of 0.13.
David Abrams (Trades, Portfolio) is the company’s largest guru shareholder with 14.4% of outstanding shares. Chuck Royce (Trades, Portfolio), Jim Simons (Trades, Portfolio), Steven Cohen (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio) and Mario Gabelli (Trades, Portfolio) also own the stock.
Disclosure: I do not own the stock mentioned in the article.
