Barnes & Noble Sales Decline in Second Quarter

Hi Everyone,

Second quarter financial results have just been announced by Barnes & Noble, and the report shows what probably will be a sustained decline in sales, not only for the second quarter, but in the third and fourth quarters as well. Here's our take on the report.

Barnes & Noble
Second Quarter
Sales Decline

NEW YORK, NY/8/21/2008--Barnes & Noble, Inc. (NYSE: BKS), the world's largest bookseller, today reported sales and earnings for the second quarter ended August 2, 2008 have declined by 1.6% to $1.2 billion. The retailer attributed the loss largely to last year's record sales of J.K. Rowling's Harry Potter and the Deathly Hallows.

Barnes & Noble store sales decreased 1.6% to $1.1 billion, with comparable store sales decreasing 4.7% for the quarter. Barnes & Noble.com sales were $99.8 million for the quarter, a 3.6% comparable sales increase. Excluding prior year sales of the Harry Potter book, comparable sales decreased 1.5% in stores and increased 13.9% online.

Bestselling titles during the quarter included Stephenie Meyer's Breaking Dawn, Randy Pausch's The Last Lecture, Lauren Weisberger's Chasing Harry Winston and David Wroblewski's The Story of Edgar Sawtelle.

Second quarter net earnings were $15.4 million or $0.27 per share.

For the third quarter, the company expects comparable store sales at Barnes & Noble stores to decline in the low single digits.

Based on first-half 2008 sales performance and current trends, the company is reducing its full-year comparable store sales guidance from slightly negative to a decrease in the low single digits.

As of August 2, 2008, the company operated 723 Barnes & Noble stores and 73 B. Dalton stores. During the second quarter, 10 Barnes & Noble stores were opened and four were closed. Ten B. Dalton stores were closed during the quarter.

Barnes & Noble, Inc. will report third quarter earnings on or about November 20, 2008.

Barnes & Noble, Inc. (NYSE: BKS), the world's largest bookseller and a Fortune 500 company, operates 796 bookstores in 50 states. The company is the nation's top bookseller in quality, and for the fifth year in a row, the top bookseller brand, as determined by a combination of the brand's performance on familiarity, quality, and purchase intent, according to the EquiTrend® Brand Study by Harris Interactive®. Barnes & Noble conducts its online business through Barnes & Noble.com (www.bn.com), one of the Web's largest e-commerce sites.