03 Dec 2010 01:49:25
The company also forecast holiday quarter net income below analyst expectations. Shares fell 85 cents, or 5.7 percent, to $14.02.
Barnes & Noble is investing heavily in its e-readers, including the new Nookcolor, an associated book store and content such as children's books as it tries to retool itself for the future.
"We see a massive opportunity for Barnes & Noble in the growth of digital reading over the next five years," said CEO William Lynch. The e-reading push is necessary to offset tough competition from discounters and online retailers and capitalize on the increasing popularity of digital books, he said.
"It's clear the market for physical books is flattening and will shrink in the future as digital content scales quickly," Lynch said. "With these dynamics driving the industry, there will be fewer book stores in this country, and we expect fewer non-book retailers selling books."
The largest U.S. traditional book seller painted a rosy picture of how its electronic e-reader and e-book sales. The Nookcolor, which began shipping in recent weeks, is selling twice as fast as expected, Lynch said. He added the company has grabbed 20 percent of the electronic book market since its e-book store debuted last year.
But overall results were weaker than analysts expected. The company's loss for the quarter that ended Oct. 30 was $12.6 million, or 22 cents per share, compared with $24 million, or 43 cents per share, a year earlier. Analysts polled by Thomson Reuters expected a much smaller loss of 8 cents per share.
Revenue jumped 64 percent to nearly $1.91 billion, but that was mainly due to added revenue from the acquisition of its college bookstore unit last year. Excluding that, revenue rose just 1 percent. Revenue in stores alone fell 5 percent to $931 million.
Revenue in stores open at least a year fell 3.3 percent. The figure is considered key because it excludes results from stores that open or close during the year.
Simba Information analyst Michael Norris said the balance between digital investments and weak book sales made it a difficult quarter.
"They're making a lot of gains on the digital side, but there's so much pressure on the other store side it's hard to knock the quarter out of the park," he said.
The company predicts revenue in stores open at least a year will rise between 5 percent and 7 percent in the third quarter, and to be flat to up 3 percent for the full year. But rather than traditional books, Barnes & Noble expects revenue increases to be largely driven by sales of Nook devices and accessories, and by increases in children's products and other non-book items.
Barnes & Noble is investing heavily in its e-readers, including the new Nookcolor, an associated book store and content such as children's books as it tries to retool itself for the future.
"We see a massive opportunity for Barnes & Noble in the growth of digital reading over the next five years," said CEO William Lynch. The e-reading push is necessary to offset tough competition from discounters and online retailers and capitalize on the increasing popularity of digital books, he said.
"It's clear the market for physical books is flattening and will shrink in the future as digital content scales quickly," Lynch said. "With these dynamics driving the industry, there will be fewer book stores in this country, and we expect fewer non-book retailers selling books."
The largest U.S. traditional book seller painted a rosy picture of how its electronic e-reader and e-book sales. The Nookcolor, which began shipping in recent weeks, is selling twice as fast as expected, Lynch said. He added the company has grabbed 20 percent of the electronic book market since its e-book store debuted last year.
But overall results were weaker than analysts expected. The company's loss for the quarter that ended Oct. 30 was $12.6 million, or 22 cents per share, compared with $24 million, or 43 cents per share, a year earlier. Analysts polled by Thomson Reuters expected a much smaller loss of 8 cents per share.
Revenue jumped 64 percent to nearly $1.91 billion, but that was mainly due to added revenue from the acquisition of its college bookstore unit last year. Excluding that, revenue rose just 1 percent. Revenue in stores alone fell 5 percent to $931 million.
Revenue in stores open at least a year fell 3.3 percent. The figure is considered key because it excludes results from stores that open or close during the year.
Simba Information analyst Michael Norris said the balance between digital investments and weak book sales made it a difficult quarter.
"They're making a lot of gains on the digital side, but there's so much pressure on the other store side it's hard to knock the quarter out of the park," he said.
The company predicts revenue in stores open at least a year will rise between 5 percent and 7 percent in the third quarter, and to be flat to up 3 percent for the full year. But rather than traditional books, Barnes & Noble expects revenue increases to be largely driven by sales of Nook devices and accessories, and by increases in children's products and other non-book items.
