The Digital Reader

Barnes & Nobel released some financial data yesterday for their most recent fiscal quarter, which ended on 29 January 2011. Income was up 7% last quarter across the company, with brick and mortar stores showing an average increase of 7.3%. Online sales were a spectacular success and increased 64% over the same quarter a year ago.

From the press release:

Total sales for the third quarter were $2.3 billion, a 7% increase compared to the prior year period.  Barnes & Noble.com comparable sales increased 64% as compared to a year ago.  Barnes & Noble comparable store sales increased 7.3%, exceeding the company’s forecast for an increase of 5% to 7%.  Online and bookstore sales benefitted from strong consumer demand for NOOK™ products and related accessories as well as the company’s expanded Toys & Games selection.

Barnes & Noble College Booksellers (“College”) comparable store sales decreased 2.2% as compared to the prior year period.   The back-to-school College rush season was impacted by the inclement weather that affected many campuses throughout the country and extended the rush season from January into February, after the close of the company’s third fiscal quarter.  Factoring in the two additional weeks that contributed to this year’s rush season following the quarter’s end, comparable store sales decreased 1.3%, in-line with comparable sales guidance of flat to a decrease of 2%.

For the third quarter, the company reported earnings before interest, taxes, depreciation and amortization (EBITDA) of $170.1 million, in-line with guidance of $160 million to $190 million.  Consolidated third quarter earnings were $60.6 million, or $1.00 per share, also in-line with previously issued guidance of $0.90 to $1.20 per share.

In the quarter, the company also launched several significant initiatives to advance its strategy including:

• The launch of NOOK Color™ – the award winning first full-color touch Reader’s Tablet
• The launch of NOOK Newsstand™ – offering an extensive selection of digital newspapers and magazines, available in single copy and subscriptions in rich color
• The launch of NOOK Kids™ – the most comprehensive catalog of children’s digital books and interactive books available to be read on NOOK Color, iPad and iPhone
• The launch of an expanded Educational Toys & Games department in Barnes & Noble stores, and online at BN.com

“We’re pleased with our financial results this quarter, but just as importantly, the third quarter was another big quarter for the Company from the standpoint of key strategic progress that positions us well for the future,” said William Lynch, chief executive officer of Barnes & Noble, Inc.  “In the digital area, our eContent business continues to scale quickly such that we now sell twice as many eBooks as we do physical books at BN.com.  NOOK Color, launched in the third quarter, was named the best dedicated eReader by the Associated Press.   We’re very encouraged by the sell-through of that break-through device, as well as the newly launched NOOK Newsstand subscription service and NOOK Kids children’s digital library.   At retail, our enhanced Educational Toys & Games experience drove 47% comparable growth in the stores, and gives families yet another reason to feel good about shopping at Barnes & Noble.”