Barnes & Noble’s cost-cutting yielded a reduced quarterly loss but the bookseller’s shares fell sharply on Thursday as its results missed analysts’ estimates.
For the first quarter, Barnes & Noble reported a net loss of $10.8 million, or 15 cents per share, after a loss of $14.4 million, or 20 cents per share, for the same period last year. Overall sales fell 6.6% to $853.3 million while same-store sales, a key retail metric, dropped 4.4%.
Analysts had expected a loss of 12 cents per share on $873.0 million in revenue.
“Our first quarter earnings results improved over the prior year, as we were able to mitigate the sales decline through expense reductions,” Barnes & Noble CEO Demos Parneros said in a news release. “We expect to improve our performance in the back-half of the year, which coupled with our focus on expense reduction, will enable us to achieve EBITDA of $180 million.”
But investors took little comfort in the company’s performance, driving its shares down nearly 8% to $7.22. For the year so far, the stock is down about 30%.
“Barnes & Noble continues to struggle with the sea change in the book industry as Amazon.com now controls the majority of the market and has even begun challenging B&N in the brick-and-mortar world with its own stores,” The Motley Fool said.
The first-quarter report also showed sales from the company’s online and Nook digital book reader segments. Nook sales dropped 28% to $29.5 million.
Neil Saunders, managing director of GlobalData Retail, said it is time for the Barnes & Noble to scrap Nook and focus on developing a better online platform and apps to support its business.
“The company hails the [Nook] ecosystem as an important component of its omnichannel strategy, but the fact the business is shrinking by so much demonstrates it is a very ineffective platform,” he told Chain Store Age.
For the full year, Barnes & Noble continues to expect comparable bookstore sales to decline in the low single digits. “In essence, B&N needs to refine its non-book offer and work harder to create differentiation,” Saunders said.