Analyst Gives Gloomy B&N Forecast

-- Publishers Weekly, 2/6/2008 6:53:00 AM

Explaining that it is possible Barnes & Noble could report negative same-store sales figures in the current year, JP Morgan analyst Charles Grom downgraded the stock to “neutral” from “overweight” yesterday. Grom said a poor economy, the presidential election and increased discounting from Borders could have a negative impact on sales on earnings in the year. B&N’s stock price dropped 10.7% Tuesday, on a day when the overall market fell 3%.

B&N has not issued its own forecast for 2008. For the 48-week period ended January 5, B&N reported that same store sales were up 2.0%, although holiday sales were below expectations, due largely, B&N said, to poor music sales. Grom cited the weak holiday results as an indication that “no retailer is 100% immune from today’s recessionary backdrop.”

The company is expected to release full year results March 20.