{"id":15936,"date":"2012-06-20T01:36:16","date_gmt":"2012-06-19T23:36:16","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=15936"},"modified":"2012-06-20T10:08:25","modified_gmt":"2012-06-20T08:08:25","slug":"barnes-noble-weakened-by-poor-sales","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/hardware\/15936\/barnes-noble-weakened-by-poor-sales\/","title":{"rendered":"Barnes & Noble weakened by poor sales"},"content":{"rendered":"

Barnes & Noble Inc<\/a> reported lower-than-expected quarterly revenue, hurt by disappointing sales of its Nook digital books and e-readers, and the top U.S. bookstore chain expects sales at its stores to fall this fiscal year.<\/p>\n

The bookseller’s sales in the fourth-quarter were hurt by returns of the device from retailers as well as price cuts put in place in February on some versions of the device to compete with Amazon.com’s<\/a> Kindle franchise.<\/p>\n

The company, which has bet its future on staking a claim in the e-books industry, suffered a setback as Nook revenue fell 10.5 percent.<\/p>\n

“The weakness should remind investors of the constant need for investments and the intense competition with Amazon and Apple<\/a>,” said Credit Suisse analyst Gary Balter in a note.<\/p>\n

But keeping Nook competitive is expensive: the Nook business lost $77 million on revenue of $163.6 million in the quarter.<\/p>\n

After getting a bump thanks to defunct rival Borders Group’s bankruptcy in recent quarters, the company expects sales at existing bookstores to drop by a low to mid-single digit percent in the current fiscal year.<\/p>\n

Barnes & Noble shares closed down 4 percent at $14.63. They are down 43.7 percent from a 52-week high in April.<\/p>\n

Uphill battle<\/strong><\/p>\n

The company has poured hundreds of millions of dollars into the development of the Nook, including a recent, well reviewed glow-in-the-dark model, whose positive reviews allowed it to garner some 27 percent of the U.S. e-books market in the 2-1\/2 years since the reader was launched.<\/p>\n

But that compares with 60 percent for Amazon, and in January, the retailer acknowledged slower-than-expected sales of devices such as the black-and-white Nook Simple Touch.<\/p>\n

As the black and white e-reader market matures, the battleground is shifting more to color e-readers and tablets that offer more media, and not just text.<\/p>\n

“That’s where Barnes & Noble has an uphill battle,” Morningstar analyst Peter Wahlstrom said. “Amazon has a distinct lead in that area.”<\/p>\n

Barnes & Noble is counting on a deal with Microsoft Corp and reduced development expenses for Nook to ease losses for the digital business this fiscal year.<\/p>\n

The deal, in which Microsoft will invest $300 million and get a 17.6 percent stake in a new subsidiary consisting of the Nook digital business and its College bookstore chain, is expected to close later this year.<\/p>\n

Microsoft announced plans on Monday to launch its own line of tablet computers to compete with Apple Inc’s iPad.<\/p>\n

Barnes & Noble also plans to have Nook devices and digital book stores in some international markets for the holiday season.<\/p>\n

Revenue for the quarter was $1.38 billion, up slightly from a year earlier, but below the average analyst estimate of $1.48 billion, according to Thomson Reuters I\/B\/E\/S.<\/p>\n

The company posted a net loss of $57.7 million, or $1.08 per share, for the quarter, compared with $59.4 million, or $1.04 per share, a year ago.<\/p>\n

Excluding one-time items, the loss was 98 cents a share, compared with the average analyst estimate of a loss of 93 cents, according to Thomson Reuters I\/B\/E\/S.<\/p>\n

Same-store sales at its 700 super stores rose 4.5 percent compared with the year-earlier quarter. But some of that increase was due to more of a boost than the company expected from Borders going out of business.<\/p>\n

Same-store sales at its College bookstore chain, which generates nearly one quarter of revenue, fell 2.2 percent during the quarter. But Credit Suisse’s Balter said Barnes & Noble has been able to win new contracts.<\/p>\n

Related articles<\/strong><\/p>\n

E-book settlement hurts readers: Barnes & Noble<\/strong><\/a><\/p>\n

Microsoft sets its sights on e-books<\/strong><\/a><\/p>\n

Microsoft buys stake in digital books<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Barnes & Noble Inc reported lower-than-expected quarterly revenue, hurt by disappointing sales of its Nook digital books and e-readers, and the top U.S. bookstore chain expects sales at its stores to fall this fiscal year.<\/p>\n","protected":false},"author":7,"featured_media":1247,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[25,219,2307,3235],"class_list":["post-15936","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-hardware","tag-active","tag-barnes-noble","tag-e-book","tag-e-reader"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/15936","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=15936"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/15936\/revisions"}],"predecessor-version":[{"id":15956,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/15936\/revisions\/15956"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/1247"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=15936"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=15936"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=15936"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}