Barnes
Barnes & Noble Inc., the nation’s largest bookseller, posted a 15% drop in second-quarter profit Thursday as it struggles with sluggish consumer spending.
The New York-based retailer also projected that sales at established stores would be weaker than expected, but reiterated its earnings guidance for the year.
Investors were not appeased, sending shares of the company down more than 6%, or $1.74, to $24.00 in midmorning trading.
Barnes & Noble (BKS, Fortune 500), which had benefited from sales of Harry Potter and the Deathly Hallows during the second quarter of last year, also had some big sellers this year such as Stephenie Meyer’s Breaking Dawn and Randy Pausch’s The Last Lecture.
"The closer examination of sales will reveal that even in this soft retail environment across America, the book business is stubbornly holding up," said Chief Executive Steve Riggio.
The company saw double-digit declines in sales of music, but saw its online business boom - growing 13.9%, excluding the effect of Harry Potter payday loans in 1 hour. The head of the company’s online business division resigned this week and will stay on as a consultant.
Barnes & Noble earned $15.4 million, or 27 cents per share, in the three months ending Aug. 2. That compares to $18.05 million, or 26 cents per share, a year earlier.
The 2008 quarterly earnings results included an after-tax benefit of 12 cents per share, resulting from a more favorable physical inventory shortage rate than previously estimated.