Earnings Rise 7% at Borders
by Jim Milliot -- Publishers Weekly, 3/15/2004
Borders Group reported last week that net income rose 7% for the year ended January 25, to $120 million. Earlier this year, the company said that total sales for the year rose 6.1%, to $3.7 billion.
Company CFO Ed Wilhelm said book sales, particularly sales of bestsellers, helped to drive revenue gains in the year and fourth quarter. In the final quarter, bestseller sales jumped 50% at the company's superstores and 30% at Walden. While the company faced easy comparisons with the final period of 2002, Wilhelm said there were a number of underlying trends that accounted for the huge gains this year, including strong sales in the diet and health, children's and young adult segments as well as solid sales of The Da Vinci Code and The Five People You Meet in Heaven.
Books accounted for approximately 75% of the company's total sales last year, a percentage that Wilhelm doesn't expect to change much, if at all, in 2004. The weakest segment at the retailer continues to be music, where sales declined again last year. Sales of DVD and gifts and stationery rose last year, helping to counter the music decline.
The company is expecting a strong start to the year, due largely to easy comparisons to last year when first-quarter sales were hurt by the war in Iraq. For the full year, Borders reiterated that it expects total revenue to increase 6%– 7%, driven by same-store sales increases in the low single digits at its superstores.
